Govt, De Beers to Ink Deal

Jo-Maré Duddy

17 May 2011

Last-minute negotiations ensured that Government and De Beers will tomorrow sign the landmark agreement giving birth to Namdeb Holdings and granting the State a significantly bigger stake in the local diamond industry.

The signing ceremony was confirmed by a top official in the Ministry of Mines and Energy yesterday.

“There are no more hiccups,” the official told The Namibian.

The agreement will see the restructuring of the existing Namdeb into Namdeb Holdings, owner of Namdeb Land and Namdeb Sea, the former De Beers Marine Namibia (DBMN). Government and De Beers will each have 50 per cent of the shares in the holding company.

Previously Government enjoyed 50 per cent of the shares in Namdeb, but only 30 per cent in DBMN.

Government’s role in ensuring that Namdeb continues to mine until 2050 was apparently one of the obstacles in the new negotiations.

Namdeb needs a capital injection of N$5 billion over the next ten years to implement its comprehensive plans to extend the life of the mine.

The company’s managing director, Inge Zaamwani-Kamwi, recently said although Namdeb could finance this partly from its own resources, the company expects its two shareholders, Government and De Beers, to pitch in as well.

The ministry official yesterday didn’t want to comment on what the parties agreed regarding Government’s responsibility in financing Namdeb’s future plans.

According to a memorandum Justice Minister Pendukeni Iivula Ithana sent to Cabinet last month, Government will already have to pay N$375 million to become a 50 per cent shareholder in the restructured venture.

However, the transaction was backdated to January 2006, which meant that Government was owed about N$635,7 million as arrear dividends by the old Namdeb. This was set off against the amount payable in the new negotiated settlement, which means that Government will only have to pay about N$260,7 million.

AllAfrica – All the Time