Namdeb says Namibia should lower diamond mining tax

Namibia should lower tax for the diamond sector as most land deposits, which are cheaper to mine have depleted, making it costly to operate in the southern African country, a Namdeb director has said.
"Most of our land deposits have now been depleted and we are now working on remote satellite deposits, some of which are costly to mine because of the depth at which the deposits are,” Kennedy Hamutenya, who is also the country’s diamond commissioner was quoted as saying by The Namibian Economist.
"There are still a number of places onshore where we can mine out remaining diamonds but those projects are marginal and unviable at the current tax levels. We would leave those deposits behind unless the tax regime is reduced to make their exploitation much more attractive."
He said Namdeb currently pays 55 percent tax on profits and 10 percent royalty on turnover.
“[With the] current tax rates, we would be looking at closing down the mines sooner - around 2020,” Hamutenya said. “It is really a choice between short term gain with long term pain, versus short term sacrifice and investment resulting in long term gains and benefits for all stakeholders and shareholders."
Namdeb asked the government, which also owns half of the company to lighten its tax burden last year so as to attract investment needed to extend its land-based operations beyond 2020.
However, no decision had been made yet but a cabinet committee was recently put in place to review the tax regime for the mining industry, in general.
Namdeb’s diamond output dropped to 1.3 million carats last year from 1.5 million carats in 2010.
The company was targeting an output of 1.6 million carats this year.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished