De Beers, Namibia Sign 10-Year Sales Agreement

Windhoek, Namibia--De Beers and the government of Namibia announced Monday that they have signed a 10-year sales agreement for the sorting, valuing and sales of the diamonds they mine in partnership there.

It is the longest sales contract De Beers has inked with Namibia, a country where it has been mining in partnership with the government since 1994. Ten years also is the same length as the contract De Beers signed with neighboring Botswana in 2011.

Under the terms of the contract, De Beers said Namibia will see a “significant increase” in rough diamonds made available for beneficiation, with $430 million (a figure index-linked to price so volumes do not decrease when prices increase) being offered annually to customers of Namibia Diamond Trading Company.

NDTC is the 50/50 joint venture between De Beers and the government that handles sorting and valuing of Namdeb Holdings’ diamonds. Namdeb Holdings, also a 50/50 joint venture, is the parent company of Namdeb, which mines diamonds on land, and Debmarine Namibia, which mines diamonds at sea.

In addition, the agreement dictates that 15 percent of run-of-mine production per year go to the government-owned independent sales company, Namib Desert Diamonds Pty. Ltd., and that all of Namdeb Holdings’ large and unusual diamonds, “special stones,” be made available for sale in Namibia.

The two parties will review the terms of the partnership after 10 years.

De Beers Group CEO Philippe Mellier said the agreement secures long-term supply for De Beers and ensures that the country’s diamonds will continue to contribute to its socio-economic development.

Obeth Kandjoze, Namibia’s mines and energy minister, said the new agreement “cements Namibia’s position as an important international diamond player and will provide further stimulus to advance our downstream industry.”

Namdeb operates a fleet of five diamond mining vessels, or “floating mines,” in the Atlantic Ocean off Namibia’s coast: mvs Debmar Atlantic, Debmar Pacific, !Gariep, Grand Banks and Mafuta. The company also has alluvial mining operations in the country’s northern and southern coastal regions.

Namdeb Holdings employs 2,500 people plus contractors in Namibia and the diamond industry is the second biggest contributor to the economy there, behind only the government.