Namibia’s Diamond Discoveries Seen Extending Mining by 50 Years

Namibia, Capital Markets in Africa: Discoveries of diamonds on land bordering the southern Atlantic coastal areas of Namibia, the world’s largest producer of marine gems, may extend ground-based mining operations by another 50 years, Finance Minister Calle Schlettwein said.

Namdeb Diamond Corp., jointly owned by the Namibian government and Anglo American Plc’s De Beers, struck more deposits after pushing back the sea wall at its land-based operations, Schlettwein said an interview Sunday in Kigali, Rwanda’s capital, where he was attending the African Union summit.

“An additional resource has been now made available,” he said. “And with that, the life of mine from the land-based operations has been extended by another 50 years.”

Namdeb, as the De Beers unit is known, uses the latest technology to scour the bottom of the Atlantic for gems. For land-based operations, which have been mined for more than a century, it pushes back the sea by creating an artificial sea wall. This has led to recent discoveries made behind the inter-tidal zone, Schlettwein said.

Namibia’s Atlantic coast area holds an estimated 80 million carats of gems, the world’s richest marine diamond deposits, which were carried to the sea by the Orange River and could be mined beyond 2050, according to De Beers.

Offshore mining is progressing well and the exploration has “found some good pockets of quality deposits” in the sea, he said.

De Beers Deal
The government signed a 10-year deal with De Beers in May to get $430 million of rough diamonds annually for sale through the country’s Diamond Trading Co. The agreement would still be improved to Namibia’s advantage, Schlettwein said.

“I don’t think it is the end of it, it is one step closer to our target of having better value-sharing,” he said. Namibia is looking to produce jewelry locally “so that we can grow not only raw material, but all the components,” he said.

Namibia’s economy may face headwinds from a downturn in commodity prices after gross domestic product increased 5.7 percent in 2015. Expansion, which the central bank forecasts at 4.3 percent this year, is “coming down but we expect that we will still be having robust growth” in 2016, Schlettwein said.

The government has shelved plans to exploit the Kudu gas deposits that would have fueled a gas-to-power plant. “It’s on the back-burner, public resources are being directed to other projects,” he said. The gas deposit’s ownership has reverted back to the state-owned oil company Namcor after Tullow Oil Plcwithdrew, he said.

Source: Bloomberg Business News