Sterling diamond relationship

07 May 2019 | Business

Namibia and De Beers partnership bears fruitDiamond mining in Namibia sets an example for partnership and collaboration.

Stella Ipinge, Debmarine spokesperson: “Yes, indeed, we are still pursuing the opportunity of acquiring a new diamond recovery vessel.”

AUGETTO GRAIG

Diamonds are forever and these precious stones have come to symbolise truly lasting relationships worldwide, with the presentation of a diamond wedding ring now common practice. Namibian diamonds are of exceptional gem quality and so it should not be too surprising that the country boasts one of the more unique, long-lasting and lucrative diamond mining relationships in the world.

The international mining behemoth De Beers and the government of Namibia formalised their partnership in 1994 when the old Consolidated Diamond Mines (CDM) transformed into Namdeb. CDM’s presence in Namibia can be traced back as far as 1920 when diamond-mining companies along the Orange River were amalgamated. The first diamond was found in Namibia was by Zacharias Lewala in 1908, and by 1912 extensive mining was taking place around Luderitz, with CDM formed in 1920.Before that, Ernest Oppenheimer had registered his company, Anglo American, on 25 September 1917. The end of the First World War brought a golden opportunity: The diamond fields in German South West Africa that would be placed under new ownership following Germany’s defeat. De Beers was interested in the Lüderitz diamond fields, as was Oppenheimer, while German nationals in South West Africa feared for their wealth and shares in their diamond-mining companies.

The only solution was to establish a merger with South African mining companies after the war ended. In the autumn of 1919 negotiations took place over two weeks in Amsterdam. Out of those negotiations the new company Consolidated Diamond Mines (CDM) of South West Africa was born. CDM started with capital of 3.75 million British pounds divided into one-pound shares, writes Olga Levinson in her book ‘Diamonds in the Desert’. Only after the contracts were signed on 9 February 1920 in Cape Town, was the identity of the mystery man behind the deal finally revealed: Ernest Oppenheimer of Anglo American. By 1929 he became the chairman of De Beers, with Anglo American a major shareholder.

Harry Oppenheimer, son of Sir Ernest Oppenheimer, joined the De Beers board in 1934, and in 1939 he headed to New York to kick-start De Beers’ pioneering diamond advertising campaign. After World War II, in 1947 Frances Gerety, a young copywriter at the NW Ayer advertising agency, coined the timeless slogan ‘A diamond is forever’. Fifty years later, it is recognised by Ad Age as the greatest advertising slogan of the 20th century. Taking over after the death of his father in 1957, Harry Oppenheimer was instrumental in the company’s expansion to Canada in 1960, and later in 1967, a year after it gained independence, to Botswana.

When Namibia became independent De Beers initiated a similar relationship and in 1995 entered into an agreement for a 50/50 joint venture with the new government, bringing Namdeb into existence. In 2000 this development was followed by the establishment of De Beers Marine Namibia (DebMarine Namibia).Namdeb and Debmarine Namibia are the offspring of a partnership of which De Beers’ resident director in Namibia Daniel Kali in 2017 said: “Our 50/50 model of joint ventures in Namibia is without a doubt in the forefront in ensuring government's partnership with a global private-sector leader.

“Now in its twenty-third year, our partnership is the leading corporate tax contributor to the Namibian treasury, with only SACU revenue surpassing our partnership’s contribution.” In 2017 Namdeb paid over corporate taxes of some N$1.92 billion to the Namibian government, as well as N$1.15 billion in royalty taxes, and N$71 million in export levies through its Namibia Diamond Trading Company (NDTC) subsidiary. Output of 426 000 carats that year supported the wages and salaries to 1 588 permanent and 70 temporary workers. Only 26 expatriates worked for the company in 2017 while 964 contractors were awarded work opportunities.

Namdeb spokesperson Shangelao Ndadi is particularly proud of the positive legacy created by the company, and its leadership in empowering Namibian women. Namdeb was the first Namibian company to have a female managing director, Inge Zaamwani-Kamwi. Ophelia Netta was the first female appointed to work as mine manager at Namdeb from April 2009 until May 2010. Namdeb first employed a team of 12 Transvac operator women who started in September 1999. Transvac operators work on the bedrock and collect diamondiferous material in accordance to bedrock cleaning operating standards,” she said.“Namdeb prides itself on being over 99% Namibianised,” she said, and it takes pride in fostering skills development in support of Namibia’s national plans. “This is evidenced by the number of trained Namdeb professionals within the country,” she said. In 2002 Namdeb became the first organisation in Namibia to provide antiretroviral medicine (ARVs) to employees and extended this support to spouses, life partners and dependants.

Namdeb has also taken a leading role in protecting the fragile Namibian environment. Its operations are located within the Tsau //Kaeb (Sperrgebiet National Park), adjacent to the Orange River and Namibian Islands Marine Protected Area. Namdeb is involved in numerous conservation monitoring and ecological history programmes, which aim to minimize the potential environmental impact of its operations. Namdeb’s environmental management system is aligned with the ISO14001:2015 international standard. Environmental clearances are in place for all Namdeb licence areas. The company conducts Environmental Impact Assessment (EIA) processes. “Considering the unique location of Namdeb’s diamond mining operations and the potential tourism in the area, the integration of bio-diversity stewardship onto the mine’s life cycle from exploration, projects, operations and closure is a critical strategy,” says Ndadi.

The distinctive biodiversity and archaeological and heritage found within Namdeb’s mining licence areas have resulted in a comprehensive rehabilitation programme which retrospectively addresses the legacy of over 100 years of mining in Tsau//Kaeb (Sperrgebiet) National Park. “Namdeb prides itself with a rehabilitation plan that is aligned with the park’s land use plan. This plan makes provision for rehabilitation of areas for mining based, nature based and conservation areas,” she sai. Con-current rehabilitation is catered for annually. Backfilling and re-vegetation of plant species of conservation importance takes place at Sendelingsdrif and Obib mines. More than 134 000 tons of scrap has been removed from the company’s licence areas since the inception of a Joint Venture in 2008, she said.

After a hundred years diamonds found on land are fewer, while the promise of the ocean rings louder. In 2006 Debmarine Namibia production surpasses land based diamond production, under the leadership of the Chief Executive Officer Otto Shikongo. In 2017 Debmarine Namibia achieved its production target by mining an undersea area of 14.7 square kilometres and delivering 1.378 million carats of diamonds. It employed 906 individuals, of whom 140 were expatriates, while 26 temporary work opportunities were created. Debmarine is at the forefront of the application of new technology, necessitated by its deep-sea mining operations.

According to Debmarine spokesperson Stella Ipinge, the company is eager to grow its fleet of six specialised diamond exploration and mining ships. “Yes, indeed, we are still pursuing the opportunity of acquiring a new diamond recovery vessel. However the final decision on the way forward is still awaiting board approval. Hopefully by next month we will have more exciting and informative news on this development,” she says.According to maritime-executive.com, the new ship could cost around N$2 billion to build and another N$5 billion for mission equipment, including crawler-mounted dredging technology. At 176 metres long, the ship will be slightly larger than the current largest vessel, the incredible Mafuta (174 metres), the site reported.

“The vessel is intended to be a recovery vessel and will be the seventh in the fleet. It will use crawler technology similar to the current MV Mafuta,” Ipinge says. To date the crawler-mounted dredging technology used on the Mafuta is the best-performing mining tool in Debmarine’s arsenal, delivering more diamonds than more conventional drilling systems, she says. “The Mafuta now contributes up to 40% of total production,” she says. In June 2017, Debmarine inaugurated the most technologically advanced marine diamond sampling and exploration vessel in the world, the MV SS Nujoma.

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