Namibia Awaits Local Diamond Supply Before Approving New Polishing Plants

The Namibian Diamond Commissioner, Kennedy Hamutenya, will not issue licenses to polish diamonds until there are enough goods to support the existing plants. Last week, De Beers agreed to supply local manufacturers with enough rough goods to support the country’s diamond industry.

“I have placed a moratorium on the granting of new diamond cutting and polishing licenses until further notice,” Hamutenya said in a statement Friday.

“Furthermore, no pending or incoming licenses will be considered any longer,” Hamutenya was quoted by Sapa, adding that some investors had set up plants but could not access locally produced stones as demand outstripped supply.

In June 2004, Israeli diamantaire Lev Leviev opened a polishing plant in Windhoek. A year later, Leviev, who operates a marine diamond mining operation in Namibia, had turned to rival company De Beers to obtain diamonds to supply his plant with larger diamonds since the stones he is mining are too small.

According to the new agreement between Namibia and De Beers, a new joint venture, NDTC, will be formed, which will support local marketing initiatives. The new agreement will ensure that up to N$2billion ($300 million) worth of diamonds will be made available locally by 2009.

Hamutenya said the country has a fledgling polishing sector with just three plants operating and four waiting for local diamond supplies, adding that 12 licenses had been issued so far.