De Beers and Namibia have announced a groundbreaking partnership to invest in a cutting-edge offshore diamond mining vessel, with an eye-watering price tag of $468 million. This state-of-the-art ship is set to revolutionize diamond mining off the coast of Namibia, projecting an impressive increase of 500,000 carats in annual production by the year 2022.
The collaboration between De Beers and the Namibian government signifies a strategic maneuver to attract foreign investment into the mining sector, which serves as a vital pillar of Namibia’s economy. The new vessel will bolster Debmarine Namibia’s fleet, a joint venture known for extracting top-quality diamonds from the ocean floor with the aid of advanced surveying equipment.
Mark Cutifani, CEO of Anglo American, underscored how this investment aligns perfectly with the group’s efficiency and margin-focused strategy. Boasting an EBITDA margin exceeding 60%, this project holds the promise of substantial returns. The Mines and Energy Minister of Namibia, Tom Alweendo, reaffirmed the government’s dedication to fostering inward investment in mining for the benefit of both investors and the country.
In contrast to other African nations that have imposed stringent regulations on foreign miners, Namibia has been pivoting towards a more welcoming environment for investors. In a major policy shift, Namibia eliminated a requirement stipulating partial ownership and management by black Namibians for mining licenses last year.
The mining sector, particularly uranium and diamonds, plays a pivotal role in Namibia’s economic landscape, contributing 14% to the country’s GDP in 2018 according to the Namibia Chamber of Mines. Diamonds are also a cornerstone of Anglo American’s core profit, representing 14% of earnings in 2018.
Despite facing challenges such as competition from lab-grown diamonds and declining values of smaller stones, natural high-quality diamonds continue to command a premium price. Industry analysts predict a tightening diamond supply, anticipating a slowdown in production growth and a potential decline by 2021.
Amidst concerns about the impact of lab-grown diamonds on the market, Namibia’s Mines and Energy Minister remains optimistic that discerning consumers will uphold the distinction between natural and lab-made diamonds. Educating consumers on the value and uniqueness of natural diamonds is crucial to maintaining the industry’s allure and sustainability.
For more information on the partnership between De Beers and Namibia in diamond mining, visit Mining.com. Additionally, to learn about the innovative technology utilized in offshore diamond mining, check out The Namibian.
