Diamond glitter is back, with Namdeb reporting that last year’s diamond production and sales have bounced back to levels last seen before the 2008 global economic meltdown, according to the New Era, a Namibian online daily.
And not only is there high production projections for this year, Namdeb is also looking at spending N$5 billions to extend diamond mining activities to year 2050.
“Traditional consumers [of diamonds] are showing some positive recovery,” said Inge Zaamwani-Kamwi managing director for Namdeb, the joint venture company between the Namibian government and De Beers Group.
Diamond production during 2010 was 1,472 million carats from the 929,000 carats produced in the previous year.
Diamond carats sold amounted to 1,522 million, to generate annual revenue of N$5 billion, which 49 percent up from last year’s revenues. Net profit for the year is N$419 million up from the N$414 million loss incurred in 2009 at during the crisis.
Besides traditional buyers of diamonds in the USA, the Middle East and Japan, Namdeb has its eyes set on the emerging markets of China and India where there is an accelerated growth.
The diamond company has vowed to channel a significant part of its future investments in marketing and developing opportunities in these emerging markets.
“In the long term, the supply and demand dynamics of the diamond business remain attractive. Traditional consumer markets are recovering at the same time as demand growth in the emerging markets of China and India is expanding rapidly,” said Zaamwani-Kamwi.
Namdeb is looking to extend diamond-mining activities to the year 2050, and has plans to re-invest into current mining operations, expansions and bringing to stream new mining areas. Among the targeted mining area is the Elizabeth Bay mine.
To achieve such long-term production, Namdeb says it needs about N$5 billion, but shareholders still have to come to an agreement on how to come up with the funds. Zaamwani-Kamwi says shareholders are looking at all options of raising capital from shareholders’ own funds to debt financing and floating part of the company on the local bourse.
Yet at present, the long-term production plan remains just that, a long-term plan until the time that the mine management is able to put before shareholders the projected returns and associated risks.
Meanwhile, the prolonged negotiations between the Namibian Government and De Beers group on the shareholding restructuring of De Beers Marine Namibia is complete.
Representative for De Beers, Daniel Kali, says the results of those negotiations “would be announced in due course”.
Government has been searching to increase its shareholding in De Beers Marine Namibia from the current ownership of about 30 percent to an equal shareholding with De Beers Group. This is more important to the Government because diamond-mining activities on land are on the decrease with more diamonds mined at sea.
Namdeb is optimistic for the year with the diamond market propped up by the continued positive growth globally, even though such growth is happening at a slow pace and is yet to reach the very same level of pre-2008 global economic crisis.
“After the better than expected Christmas retail season, the US market is expected to continue its recovery and the exceptional growth seen in China and India is expected to be sustained,” said Zaamwani-Kamwi.
