Diamond price slump tests NDP6 ambitions

The ongoing slump in global diamond prices is placing mounting pressure on Namibia’s development ambitions.As one of Africa’s leading diamond producers, Namibia consistently ranks among the world’s top five in terms of both volume and value.Under its Sixth National Development Plan (NDP6), Namibia has identified diamonds as a priority sector, aiming to expand domestic cutting and polishing activities, boost revenue collection and promote local beneficiation.However, unlike sectors such as uranium and lithium, the plan does not set firm production or output targets for diamonds.Earnings hit as prices slideIn 2024, a fall in global demand caused rough diamond prices to drop by an estimated 15%.Profits from De Beers’ Namibian operations fell to N$1.09 billion in the first half of 2025, down from N$1.24 billion during the same period in 2024.The company’s latest financial disclosures also show a decrease in underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA), falling from N$1.58 billion to N$1.47 billion. Production and investment decline sharplyRough diamond production dropped by 36% in the second quarter of 2025, reaching 4.1 million carats, as part of a planned adjustment to match reduced global demand.The average price per carat also fell sharply, from N$7 886 to N$6 164, further impacting earnings.As part of its cost-saving measures, the company reduced its capital spending in Namibia from N$326 million to N$126 million.Despite these cutbacks, cost efficiency improved, with production costs per carat reduced from N$4 895 to N$3 898.Figures published in last week’s Market Watch showed that Namibia’s diamond production fell by 5% in the second quarter of 2025, from 561 000 to 535 000 carats. This decline followed strategic downsizing at Debmarine Namibia, including the retirement of the Coral Sea vessel and the temporary suspension of operations on the Grand Banks vessel.The Coral Sea had been used primarily for light offshore recovery and exploration, while the Grand Banks had been deployed across several marine blocks.Their removal forms part of a broader operational streamlining initiative aimed at containing costs amid soft market conditions.Global headwinds and synthetic competitionThe Chamber of Mines, in its 2024 annual report, noted that while mineral markets experienced mixed trends, diamond prices were particularly hard-hit.De Beers noted in several reports that demand weakened notably in major markets such as the United States and China, while synthetic diamonds gained further traction as a lower-cost alternative.The report stressed that this shifting demand landscape poses structural risks for natural diamond exporters like Namibia.It also linked the mining sector’s overall contraction in 2024 primarily to the slowdown in diamond production. “Diamond production fell by 6.3% in 2024, primarily due to weaker global prices, reduced demand in key markets and deliberate production cuts aimed at stabilising prices and preserving high-quality reserves,” the report stated.Limited supportFurther complicating the picture is a new trade policy from the United States.A recent executive order issued by President Donald Trump reduced import tariffs on goods from various African countries, Namibia included, to 15%.However, this measure is unlikely to significantly benefit Namibia’s diamond sector, particularly if demand from US buyers continues to erode.The downturn arrives at a time when NDP6 outlines ambitions to boost domestic diamond processing and reduce reliance on raw exports.The combination of falling prices and reduced output places those goals under strain.Unless market conditions improve or the country pivots more decisively into other resource sectors, meeting 2030 development targets tied to diamonds may prove difficult.Employment threatenedDiamonds remain one of the mainstays of employment in Namibia’s mining industry.Of the 20 654 people directly employed in mining during 2024 – a 13.6% rise from 2023 – about 3 000 held jobs tied to diamond operations.Namdeb and Debmarine Namibia continue to anchor the workforce, accounting for about 17% and 12% of mining employment, respectively.In addition to permanent jobs, the industry supports thousands more through contracting, downstream services and value-adding processes.The sector also remains a vital source of government revenue, contributing more than N$1.69 billion in pay-as-you-earn tax in 2024.nikanor@nmh-hub.com.na

Diamond price slump tests NDP6 ambitions

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Namibian Sun 2025-08-05

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Diamond price slump tests NDP6 ambitions

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Namibian Sun 2025-08-05

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