Ithete defends stripping diamond firms of sightholder status
Mines minister Natangwe Ithete has clarified that the three companies that lost their sightholder status failed to meet the Namibia Diamond Trading Company's (NDTC) minimum purchase requirements as stipulated in their supply agreements.
Ithete was responding to questions from LPM member of parliament Eneas Emvula, who had asked why the NDTC had terminated the sightholder status of Duiker Investments One Hundred and Forty-Two Proprietary Limited, trading as Almond Diamonds Ltd, along with two other companies.
Emvula had also written to NDTC CEO Brent Eiseb on 9 April, referencing a notice issued by Eiseb on 13 December 2024 regarding the terminations.
He pointed out that Duiker Investments One Hundred and Forty-Two Proprietary Limited employed 115 Namibians and has over 18 years of experience in the industry.
"Notably, the company in question has over and above exceeded the expectations cited in the beneficiation report (page 44, IPPR & Hanns Seidel Foundation, 2017) by investing in human and infrastructure resources required to grow the local diamond-cutting industry," Emvula wrote.
Bad for development
Emvula added that as of 2024, Namibia had 15 diamond-cutting and -polishing companies operating under sightholder agreements issued by NDTC.
He outlined the ownership composition as follows: Israeli – 3 (20%), Indian – 8 (53%), Israeli-American-Namibian joint venture – 1 (7%), Israeli-Indian joint venture – 2 (13%), and Namibian – 1 (7%).
He warned that the NDTC’s actions against the cutting and polishing sub-sector pose a serious risk to the already strained local economy and could lead to the loss of stable household income for 320 to 400 dependants of the 80 affected employees.
“In the strongest terms, we find the termination of their sightholder status detrimental and highly devoid of the economic and social developmental objectives of the sector and country at large,” Emvula stressed in the 9 April letter.
Compliance criteria
In his response, Ithete explained that the companies failed to meet the minimum purchase requirements stipulated in the NDTC supply agreement, either through the actual purchase of rough diamonds or through achieving the required level of beneficiation performance.
“The terms and conditions for retaining sightholder status are clearly detailed in the NDTC Rough Diamond Supply Agreement and are communicated to sightholders regularly during the three-year contract period,” Ithete said.
He said the NDTC uses an approved allocation framework guided by the NDTC code, which includes a range of compliance criteria.
"Among these are financial compliance criteria, which require that sightholders declare their financial accounts by national financial reporting standards," he noted, adding that "financial accounts, as approved by auditors, show a debt-to-equity ratio of no more than 70:30.
"NDTC sightholders are expected to fully comply with these financial criteria throughout the entire supply period."
Ithete further noted that, in terms of negotiation compliance, NDTC sightholders are required to operate fully functional cutting and polishing facilities within Namibia for the duration of the supply period.
The minister added that a company must meet a minimum purchase value of US$15 million to be eligible for supply and maintain sightholder status.
"This ensures they can support their Namibian operations with a critical level of supply, enhancing the reliability and sustainability of local operations,” he noted.
Minimise losses
On the measures in place to support sightholders in maintaining their status, Ithete said NDTC provides detailed explanations when terminating a company’s status.
“This process aims to help the companies identify areas for improvement should NDTC consider expanding the sightholder list in the future.
"Furthermore, NDTC and the [ministry] are committed to working with affected companies to minimise job losses should those companies decide to cease operations in Namibia.”
Ithete underscored that there have been previous cases where NDTC, the ministry and the Diamond Manufacturing Association of Namibia “collaborated to find placements for employees affected by factory closures”.
Stakeholders outlined
He said the mines and energy ministry, in conjunction with NDTC sightholders and other key stakeholders, continues to explore projects and initiatives aimed at unlocking additional opportunities in Namibia’s downstream beneficiation landscape.
"One such initiative is the successful launch of the NDTC Enterprise Development Programme (EDP) in January 2023. Though still in its pilot phase, the programme has trained Namibian citizens to participate meaningfully and inclusively across the entire diamond value chain."
He further revealed that there are currently 12 cutting and polishing factories operating in Namibia. Of these, 10 are NDTC sightholders, and two are part of the EDP.
Of the 10 NDTC sightholders, five are wholly foreign-owned. Namibian citizens own 26% of shares in four sightholder companies and 41% in one.
As for the two EDP companies, one is 100% Namibian-owned, while the other has a 51% Namibian ownership stake.
Since 2021, NDTC sightholder companies have invested approximately N$500 million in infrastructure and technology upgrades in their Namibian operations.
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Ithete was responding to questions from LPM member of parliament Eneas Emvula, who had asked why the NDTC had terminated the sightholder status of Duiker Investments One Hundred and Forty-Two Proprietary Limited, trading as Almond Diamonds Ltd, along with two other companies.
Emvula had also written to NDTC CEO Brent Eiseb on 9 April, referencing a notice issued by Eiseb on 13 December 2024 regarding the terminations.
He pointed out that Duiker Investments One Hundred and Forty-Two Proprietary Limited employed 115 Namibians and has over 18 years of experience in the industry.
"Notably, the company in question has over and above exceeded the expectations cited in the beneficiation report (page 44, IPPR & Hanns Seidel Foundation, 2017) by investing in human and infrastructure resources required to grow the local diamond-cutting industry," Emvula wrote.
Bad for development
Emvula added that as of 2024, Namibia had 15 diamond-cutting and -polishing companies operating under sightholder agreements issued by NDTC.
He outlined the ownership composition as follows: Israeli – 3 (20%), Indian – 8 (53%), Israeli-American-Namibian joint venture – 1 (7%), Israeli-Indian joint venture – 2 (13%), and Namibian – 1 (7%).
He warned that the NDTC’s actions against the cutting and polishing sub-sector pose a serious risk to the already strained local economy and could lead to the loss of stable household income for 320 to 400 dependants of the 80 affected employees.
“In the strongest terms, we find the termination of their sightholder status detrimental and highly devoid of the economic and social developmental objectives of the sector and country at large,” Emvula stressed in the 9 April letter.
Compliance criteria
In his response, Ithete explained that the companies failed to meet the minimum purchase requirements stipulated in the NDTC supply agreement, either through the actual purchase of rough diamonds or through achieving the required level of beneficiation performance.
“The terms and conditions for retaining sightholder status are clearly detailed in the NDTC Rough Diamond Supply Agreement and are communicated to sightholders regularly during the three-year contract period,” Ithete said.
He said the NDTC uses an approved allocation framework guided by the NDTC code, which includes a range of compliance criteria.
"Among these are financial compliance criteria, which require that sightholders declare their financial accounts by national financial reporting standards," he noted, adding that "financial accounts, as approved by auditors, show a debt-to-equity ratio of no more than 70:30.
"NDTC sightholders are expected to fully comply with these financial criteria throughout the entire supply period."
Ithete further noted that, in terms of negotiation compliance, NDTC sightholders are required to operate fully functional cutting and polishing facilities within Namibia for the duration of the supply period.
The minister added that a company must meet a minimum purchase value of US$15 million to be eligible for supply and maintain sightholder status.
"This ensures they can support their Namibian operations with a critical level of supply, enhancing the reliability and sustainability of local operations,” he noted.
Minimise losses
On the measures in place to support sightholders in maintaining their status, Ithete said NDTC provides detailed explanations when terminating a company’s status.
“This process aims to help the companies identify areas for improvement should NDTC consider expanding the sightholder list in the future.
"Furthermore, NDTC and the [ministry] are committed to working with affected companies to minimise job losses should those companies decide to cease operations in Namibia.”
Ithete underscored that there have been previous cases where NDTC, the ministry and the Diamond Manufacturing Association of Namibia “collaborated to find placements for employees affected by factory closures”.
Stakeholders outlined
He said the mines and energy ministry, in conjunction with NDTC sightholders and other key stakeholders, continues to explore projects and initiatives aimed at unlocking additional opportunities in Namibia’s downstream beneficiation landscape.
"One such initiative is the successful launch of the NDTC Enterprise Development Programme (EDP) in January 2023. Though still in its pilot phase, the programme has trained Namibian citizens to participate meaningfully and inclusively across the entire diamond value chain."
He further revealed that there are currently 12 cutting and polishing factories operating in Namibia. Of these, 10 are NDTC sightholders, and two are part of the EDP.
Of the 10 NDTC sightholders, five are wholly foreign-owned. Namibian citizens own 26% of shares in four sightholder companies and 41% in one.
As for the two EDP companies, one is 100% Namibian-owned, while the other has a 51% Namibian ownership stake.
Since 2021, NDTC sightholder companies have invested approximately N$500 million in infrastructure and technology upgrades in their Namibian operations.
[email protected]
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