Mr. Kennedy Hamutenya, Diamond Comissioner, Ministry of Mines and Energy, Government of Namibia
What expression do you bring from Antwerp conference?
I think the foreigner companies are interesting in Southern Africa. A lot of businessmen from Israel, Belgium and India are coming here. This affects the business . This affects the diamond pipeline. For years Namibia has only been exporting rough diamonds. We want more than that. This is the manifestation of that aspiration and our vision of downstream processing. Obviously we have been told that we should not do it “because it is not for us and that we do not have competitive advantage. We do not have the skills, we do not have the technology.” But this things you can buy. You can buy skills, you can buy the technology. You can work on productivity. You can transfer skills. That what is exactly happening at Namgem , Namcot and other factories. So for us this is a challenge. We may succeed, so at least we are going to give it a try. People who are coming here are business minded people. If they did not see the potential in Namibia they would not come.
What is the main purpose of your visit to Antwerp?
It was for the World Diamond Conference. I am always attending key World Diamond Conferences around the world such as in Antwerp or in Tel Aviv. It is about networking and learning about new ideas. To be in touch with what is happening in the industry, to be in touch with people working here in Namibia who have operations elsewhere. Visiting their factories in Antwerp and other places to see what they are doing there that they might implement in Namibia. Exploring ideas and investments opportunities. Looking at how can we nurture and grow our industry in Namibia. So it can be viable and sustainable for the long term. As I said it is a small world. You can not be in a cocoon. You have to have a global perspective on the industry. You have to know what is happening in the pipeline so that when challenges come you know how to confront them.
Did you bring any new idea for diamond industry in Namibia?
I did not bring any new idea. As I said the world is very small. We are dealing with the same people. The industry is very small. We do not have strangers. The same people now investing in Namibia we have met in other parts of the world, in the diamond centers around the world. We meet the same people in different places with the same ideas.
Are you going to open a branch in Botswana next year?
We are small country with a small production. We are concentrating our efforts here in Namibia. Of course, we are supporting the aggregation process in Botswana. The aggregation processing is migrating from London to Botswana. A number of operations taking place at DTC London are moving to Botswana and to Southern Africa in general but some marketing and sales functions will remain in London, close to the markets and the financial institutions that service the diamond industry. Obviously Namibia together with Botswana and South Africa and other countries in SADC and within the SACU framework are talking about free trade in the future, removing all forms of barriers to trade. We are also talking about a common monetary unit by 2015. As I said people want to be here in Namibia because it is a free and democratic country that abides by the rule of Law. It is also a peaceful , beautiful and clean country. It is close to Botswana where the aggregation is going to take place. So we may not have enough goods tomorrow but we acan always talk to our neighbors and to our partners to see how we can advance our agenda. Our goods will add value to the aggregated goods in Botswana and perhaps Botswana can retaliate by also helping our factories with their huge quantity of diamonds. Maybe Alrosa will also help supply our factories with goods. There is a lot of potential in Southern Africa.
What is condition of row material supply in Namibia?
Obviously you may be aware of this, we are going through a commodity boom throughout the global economy, driven by emerging markets India and China. China is growing very fast – we are talking about double digit growth per annum in China. This is a major catalyst for increased demand for row materials such as copper, uranium, zinc and other strategic minerals. People in China and India now have more disposable income as a huge middle class is being created and they want to spend money on luxuries such as diamonds. There is a growing demand for diamonds as a result of those dynamics. The diamond industry is also doing a good job to create demand by doing the right things through efficient distribution and marketing of diamonds, through having diamond in the right hands. Before diamonds went through 15 hands before they were cut and polished, and even through many more hands before they ended up on someone’s finger. Now there is a re new models for distribution and marketing. Through vertical integration diamonds are being pushed into the market. The more people buy diamonds the more the pipeline is working better for all stakeholders. The more money is made for all stakeholders. Because margins are low in the manufacturing one needs to cut the right diamonds and the right quantities to make profit and stay above the water. You have to have huge turnover. If the diamond market is doing good Namibia is also doing good. Most of Namibia’s Government revenue is coming from diamonds and so this industry is very strategic for us.
What part of rough diamonds will be polished in Namibia?
16 %. Is there any outlook for Russian-Namibian cooperation? I just came from Russia with my Permanent Secretary and our minister of Foreigner Affairs and A huge delegation from other ministries. Obviously Namibia and Russia have a very strong relationship dating back before our independence. Russia played a pivotal role in Namibia attaining its freedom and independence. So even after the collapse of the Soviet Union those ties between Russia and Namibia remain strong. When I was in Russia we explored many investments opportunities between our countries. Namibia is experiencing an energy crisis and Russia has shown a big interest in helping us resolve this problem. We discussed a lot of things. We will cooperate in uranium, diamonds, in energy, health, education.
Do you expect price increase for rough diamonds in Namibia?
Yes. The price was already increased a few days ago by 0.9 percent for Namibian diamonds.
How often will it go up?
It depends. De Beers is looking at the entire pipeline. How the goods are moving in pipeline. Looking at polished prices. How manufacturers are doing. Levels of bank debt across the industry What is happening with Producers. What is happening with the jewelers. They are looking at their entire pipeline to see what adjustments can be done to regulate the traffic so there are no goods jammed in e the traffic. They just made an adjustment now.
Mr. Vybornov in his article made a statement that the African countries and Namibia particularly are going to improve the polishing of her own diamonds. Do you have enough experience to do it on your own or you are going to use specialists from the other countries? Do you have enough technology to polish diamonds?
Technology is going to be changed. The companies in Namibia are established all over the world. They have businesses all over the world. So the will bring their expertise and technology to Namibia as well. There are sources of diamonds from other places than Namibia.
Are there Government Companies in Namibia or only private foreigners companies? In cutting and processing?
Yes. Only Namdeb and Namgem where Government owns 50 %.
Are you going to establish more companies?
Maybe.
Do you have any subsidy for establishing new companies?
No subsidies. The only help from Government is create an enabling environment for industry to prosper. We do not need subsidies. If they are doing business the right way then they do not need subsidies.
How many factories have been opened this year?
Seven. They will be eleven by March next year.
Why did the foreigner companies come to Namibia?
It is because we have proper legislation and reached an agreement with De Beers, apart from all other good things about Namibia.
Is that the main reason?
The first reason is the Diamond Act. We made provisions for licensing. The second one is an agreement with De Beers.
Will the new Diamond Companies pay the tax?
All new companies are registered as EPZ (export processing zone) enterprises. So they are not taxable.
Reported by Veronica Novoselova,
Rough&Polished Africa Bureau Editor in Namibia
