Lifeline for diamond industry as Namdeb extends current lifespan of mine by another 20 years
Namdeb Diamond Corporation on Thursday announced the approval of its long-term business plan, which will see the extension of the current life of the mine from 2022 to 2042.
Under the previous business plan, the land-based Namdeb operations would have come to the end of
their life in 2022 due to unsustainable economics.
As part of the new plan, the government has offered Namdeb royalty remission from 2021 to 2025, with the royalty rate during this period reducing from 10% to 5%.
This royalty remission has in turn underpinned an economically sustainable future for Namdeb via a life-of-mine extension that is forecast to generate a financial contribution for Namibia of approximately N$40 billion.
“This is great news for the hard-working women and men of Namdeb, as well as for all our community partners who we are proud to have worked with over the years. We now look forward to starting a new chapter in Namdeb’s proud history,” Riaan Burger, Namdeb CEO said.
The life of mine extension also aims to deliver ongoing employment to its existing employees, the creation of approximately 600 additional roles, ongoing benefits for community partners and approximately 8 million carats of additional high-value diamond production. The production amounts to revenue of N$159 billion and requires approximately N$2 billion capital investment over three years.
“This new business plan, forged by Namdeb management and enabled by the willingness of government to find a solution in the best interest of Namibia, means that Namdeb’s future is now secure and the company is positioned to continue making a significant contribution to the Namibian economy, the socio-economic development of the Oranjemund community and the lives of Namdeb employees,” Bruce Cleaver, De Beers CEO said.
The Mines and Energy Minister, Tom Alweendo, said it was imperative to safeguard the Namdeb operation for the benefit of sustaining the life of mine for both the national economy as well as preserving employment.