Namibia June 2017

MV SS Nujoma will expand marine diamond mining resources but problems grow at Namdia

A new diamond exploration vessel will prolong marine diamond mining. State-owned diamond marketing firm, Namib Desert Diamonds (Namdia), is riven by factionalism.

A new, large (12,000 tonne) marine diamond exploration and sampling vessel is expected to play a major role in expanding the resource base for continued mining of rough diamonds from Namibia’s seabed off the southwestern coast. The vessel is named the mv SS Nujoma after Namibia’s founding president, Sam Shafiishuma Nujoma (1990-2005), and was completed three months ahead of schedule at a cost of N$2.3 billion ($157m).1 It was formally inaugurated on 15 June, at Namibia’s main harbour, Walvis Bay.2Debmarine Namibia (DBN) says the vessel will enable the firm “to explore diamond deposits and secure diamond supply well into the future”. 3 DBN is a joint venture marine diamond prospecting and mining company, owned in equal shares through Namdeb Holdings by the government and De Beers Group.4

The SS Nujoma was constructed in Norway and fitted with a De Beers-designed subsea sampling system in Cape Town (South Africa) and has already undergone five months of successful sea trials.5 DBN noted that marine diamond mining, which began in 2002, takes place at 120 to 140 metres below sea level.6 The SS Nujoma is the first in the company fleet of five other marine diamond vessels to be dedicated to exploration and sampling as opposed to mining. The vessel incorporates a range of unique technologies that enable it to sample faster and collect larger samples, and has created 140 new jobs “the vast majority of which have been filled by Namibians”.7 Mines and energy minister Obeth Kandjoze commented:

“The mv Nujoma represents the largest-ever capital investment in underwater diamond mining and will ensure a long-term sustainable future for offshore diamond mining in Namibia.” 8

DBM mines diamonds from the ocean floor using highly advanced drill technology, supported by sophisticated tracking, positioning and surveying equipment. There is no such underwater diamond mining operation on a similar scale anywhere else in the world.

In contrast, there are increasingly signs of trouble at the 100% state-owned Namib Desert Diamonds (Namdia) company. The government launched Namdia in May 2016 to independently market a proportion of rough diamonds produced by Namdeb, a subsidiary of 50:50 joint venture Namdeb Holdings (see above). 9 Diamond commissioner Kennedy Hamutenya remains Namdia’s acting chief executive officer (CEO) and has yet to be confirmed in the post full-time amidst continuing rumours that all is not well with the firm’s diamond marketing operations (see ARC Briefing Namibia March 2017).10 De Beer’s agreement two years ago that the government could independently market 15% of the diamonds produced by Namdeb was a key component of the new marketing agreement between it and the government. Namdia’s success is thus crucial to Namibia’s capacity to make a success of selling directly to the global rough diamond market. Namdia has the potential to sell diamonds worth some N$2 billion ($0.2 billion) The resignation of Florentia Amuenje, a Namdia human resources executive, in late June, ostensibly for personal reasons, was not of itself important but enabled the local media to run the rule over what has been happening at Namdia. 11 The Namibian reminded its readers that Kandjoze had quietly appointed a board of directors last August without publicly announcing it at the time.12 Anonymous sources were quoted to the effect that these include “proxies who are there to serve the interests of private individuals and some people in power.” 13

Namdia chairperson Shakespeare Musize, a lawyer, and his deputy Tania Hangula, who doubles as the chairperson of the Development Bank of Namibia (DBN) reportedly head one of two feuding groups whilst the other is headed by Hamutenya. Muzisa’s camp wants a new CEO – other than Hamutenya – appointed, and claims that he is responsible for diamonds being sold deliberately too cheaply abroad, principally in Dubai. Hamutenya’s faction refutes the allegation of under-pricing and accuses the Musize group of attempting to sabotage Namdia’s management to take over control of diamond sales; some directors had no knowledge of the diamond sector and were simply there to line their own pockets, they allege. 14

1. [Debmarine Namibia, Media Release 15 Jun 2017. ]

2. [Debmarine Namibia, Media Release 15 Jun 2017. ]

3. [Debmarine Namibia, Media Release 15 Jun 2017. ]

4. [Website: NIEIS, Namibia at Work, Debmarine ]

5. [Debmarine Namibia, Media Release 15 Jun 2017.]

6. [Debmarine Namibia, Media Release 15 Jun 2017.]

7. [Debmarine Namibia, Media Release 15 Jun 2017.]

8. [Mining Weekly, 16 May 2016.]

9. [Press release, African Development Bank Group, 10 May 2017.]

10. [Press release, African Development Bank Group, 10 May 2017.]

11. [The Namibian, 21 Jun 2017.]

12. [The Namibian, 21 Jun 2017.]

13. [The Namibian, 21 Jun 2017.]

14. [The Namibian, 21 Jun 2017.]

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