NamDeb Rakes in Millions

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By Chrispin Inambao WINDHOEK NamDeb – the global leader in alluvial diamond mining – announced an after-tax profit of N$40 million for the first six months that came to a close on June 30, compared to the N$146 million net profit for the same period marked in 2005. NamDeb’s Managing Director, Inge Zaamwani, announced the results of the net profit for the first six months of this year at a press briefing in Windhoek yesterday. In his presentation, Group Financial Manager, Andrew Schanknecht, said average diamond prices per carat increased by 3 percent, notwithstanding a 7 percent decline in average stone size of 0.43 mm compared to the average 0.46 mm in 2005. Taxes accrued to the State for the first half amounted to N$400 million, the same amount of tax that went to State coffers during the corresponding period last year. Total taxation represents 92 percent of pre-tax profits compared to 74 percent of pre-tax profit recorded by NamDeb over the same period last year. Though there has been a decline in the average stone size mined, the alluvial diamond giant increased its diamond sales revenue by a handsome 25 percent to N$2,6 billion mainly due to an increase in the volume of carats sold mainly to overseas buyers. Diamond sales generated N$2,1 billion last year. Because of substantial capital expenditure ploughed into its onshore Elizabeth Bay Mine and marine dredging operations in the ocean at Atlantic One Mining Licence, no interim dividend has been declared because of the investments worth some N$800 million. During the period under review NamDeb produced over a million carats and sold slightly over the same quantity of which 544 000 carats were mined onshore and 537 000 carats were extracted from its dredging operations that took place on the Atlantic’s seabed. Modifications, made after the Elizabeth Bay Mine received another substantial investment that had to be approved by the company’s board of directors, swelled carat volumes. Last year it produced 951 000 carats from both its land-based operations and offshore. There was an increase of 22 percent for the first half of this year mainly due to an increase in land-based carat production at Number 3 Plant and Pocket Beaches. Though diamond revenue increased, this was adversely affected by higher equipment expenses, fuel price increases and normal inventory fluctuations while other operating expenses increased due to depreciation charges, according to the diamond giant. From the period 2006 to 2010, NamDeb has a stated strategic objective to mine 10 million carats of diamonds from which it expects to generate revenue of N$43 billion in exports, capital expenditure, import substitution and dividends. It is also currently in discussions with third parties to investigate possible ways to possibly fast-track development to exploit ultra-shallow waters. With regard to synthetic diamonds, Zamwaani said the industry “is a real threat” that poses a substantial risk to natural gems because some people who are against conflict diamonds – widely blamed for having fuelled the most barbaric wars – prefer gems made in the lab least their conscious is burdened by having indirectly funded these profit-driven conflicts. The threat posed by synthetic diamonds is so much that to the untrained eye they have similar characteristics as a real diamond in terms of color and cut. Both Zaamwani and Hilifa Mbako, NamDeb’s Group Manager: External & Corporate Affairs, also expressed concern about the possible threat posed to the industry by a block-buster movie whose theme is based on conflict diamonds due for release in December.