…After N$50m dividend for the year 2017/2018
By Business Reporter
MINES and Energy Minister Tom Alweendo has urged state-owned Namib Desert Diamonds (Namdia) , to enter the lucrative downstream diamond industry whereby it should add value through polishing and cutting its entitlement of diamonds.
Speaking at the parastatal’s dividend handover in which it declared a dividend of N$50 million to its shareholder – the government- Alweendo highlighted that the Ministry would be interested to hear from its Board and Management on how it intends to proceed on meeting the National long-term objectives of value addition of our natural resources through beneficiation.
“I do realize that with the current 15% allocation, this may prove to be a challenge and therefore there is a window of opportunity in the medium term to negotiate the terms of the contract to allow for an increased allocation. It may even want to consider venturing full-time into cutting and polishing as an extension of its current business,” he said.
Namibia’s mining sector grew by some 12.2% in 2017 and contributed the same percentage to the country’s Gross Domestic Product (GDP). This is in comparison to a contraction of 5.8% and GDP contribution of 12% in 2016, showing a marked improvement driven mainly by the improved output of diamonds, uranium and gold.
Moreover, local diamond production for the 2017/2018 financial year was just over 1,8 million carats. Of this, Namdia and other sight holders were offered 240,000 carats of Namdeb’s run-of-mine production valued at some US$360,125,000 as compared to US$291,800,000 in the 2016/17 financial year.
“We are all aware that the world’s diamantaires have a great appetite for Namibia’s rough diamonds and Namdia’s mandate which can best be described as aimed at discovering the real price for our diamonds cannot be underemphasized. It is entrusted with a high value resource which can provide meaningful change to the lives of our people through the payments of dividends and taxes to government which will in turn be used for the broader socio-economic infrastructures of our society,” Alweendo added.
Speaking at the same event, Namdia CEO Kennedy Hamutenya indicated that on average, Namdia received a total of between twelve and 23 million US Dollars per cycle, every five weeks, ten times per annum to purchase rough diamonds from the NDTC.
“This has enabled Namdia to become self-sustaining as we have been able to build up much needed cash reserves – which further enhanced our ability to mitigate financing risks by using such cash reserves as collateral for further diamond pipeline financing. In addition, we have – for the first time during the period under review – been able to use some of our own cash reserves to buy rough diamonds when our allocation of rough diamonds entitlement form the NDTC was unusually high due to disproportionate and unusual high production from the mine,” he said.
Confidente. Lifting the Lid. Copyright © 2015