Namibia Diamond Corporation (Namdeb) under the new long term plan expects to produce 7.8 million carats over a 20-year period with a revenue of N$159 billion benefit to Namibia.
“Production will be ramped up over the next two and a half years to approximately 160% of the current capacity. This means a significant capital investment of approximately N$1.8 billion and similarly, a significant increase in operational cost. The long term plan therefore results in 7.8 million carats being produced which amounts to revenue of N$159 billion benefit to Namibia. This requires approximately N$2 billion capital investment over the three years,” Namdeb Brand Manager, Shangelao Ndadi told Observer Money. In 2021, Namdeb produced 330 196 carats.
Almost a year ago on 14 October 2021, Namdeb announced the approval of a new long-term business plan that extended the current life of mine for Namibia’s land based operations as far as 2042.
Under the previous business plan, the land-based Namdeb operations would have come to the end of its life at the end of 2022 due to unsustainable economic factors.
Furthermore, Ndadi said the approval of the long-term plan is the result of a series of positive engagements between the Namdeb management team and the government, which enabled the creation of a mutually beneficial new business plan that extends the life of mine by up to 20 years. She said this will deliver positive outcomes for the Namibian economy, the Namdeb business, employees, community partners and the wider diamond industry.
As part of the plan, the government has offered Namdeb royalty relief from 2021 to 2025, with the royalty rate during this period reducing from 10 percent to 5 percent.
“This royalty relief has in turn underpinned an economically sustainable future for Namdeb via a life of mine extension that, through the additional taxes, dividends and royalties from the extended life of mine, is forecast to generate an additional fiscal contribution for Namibia of approximately N$40 billion and an estimated value of eight million carats of additional high value production,” said Ndadi.
The extension of the life of mine will see approximately 2100 (1 500 Namdeb employees ,600 contractors) jobs at Namdeb being retained.
“The extension also makes provision for the potential creation of approximately 600 jobs for the required production activities as well as ongoing benefits for community partners.”
Equally important, Ndadi continued, is the objective of the long term plan to develop a robust re-capitalized, profitable and sustainable business solution to expand and ensure the continued operation of the Namdeb Southern Coastal Mine beyond 2022.
“To date, the implementation of the ramp-up plan is progressing well and on track. Namdeb has successfully achieved the conclusion of phase 1 in June 2022 which has resulted in increased production and the introduction of a 6th bedrock team which has resulted in a 20 percent increase in mining capacity. “
Phase two is currently underway, with several infrastructure projects at various stages of construction.
The intent is to be at full production by the third quarter of 2023, Ndadi said.
In addition, the long term plan supports the company’s vision of mining profitably, responsibly and sustainably to 2050 and beyond.
Impact on //Kharas Region
Equally important, Ndadi said is for the long term plan to positively impact on the socio-economic development of Namibia with direct benefits to the //Kharas region and in particular the town of Oranjemund and Namdeb’s town transformation strategy.
“The plan therefore supports the economic transformation of the town by providing an extended period during which it is enabled to diversify and develop new economic activities beyond mining.” Tourism, agriculture and renewable energy have been cited as some of the diversification areas.
“Namdeb as a responsible corporate citizen, and a long-term partner of the Namibian government, has continued to play a key role in providing medical support to the Oranjemund community and the entire south of Namibia during the Covid pandemic.
The extended life of mine enables further support to be provided to the community. In addition, there is an opportunity for Namdeb to continue contributing towards quality public and private education support in the town of Oranjemund, as it has been for a number of years, “she said.
Furthermore, Ndadi said Namdeb will continue to partner with key stakeholders to improve health and education outcomes. “This subsequently increases livelihood opportunities; supports community resilience and enhances opportunities for economic diversification that contribute to the stability and growth of the local economy and Namibia at large. In so doing, the long term plan contributes to earning trust in natural diamonds through making life brilliant as Namdeb is enabled to continue creating a sustainable future through delivery of the sustainable mining plan.”