Namibian diamond miner banks on tax breaks to extend operations


Namibia’s biggest diamond miner, Namdeb, announced Thursday that it is in discussion with the government for possible tax breaks as it seeks to extend operations beyond 2023.

The miner, a joint venture between the Namibian government and Debeers, currently pays a 10 percent royalty and a 55 percent corporate tax on profits.

Namdeb CEO Riaan Burger told the media that the specific royalties and tax regime applicable to the diamonds sector are fairly high.

“While that may be conducive or viable for new diamond operators, it might not be conducive to an aging marginal asset like Namdeb,” Burger said.

He said he was confident that the government would grant the company a waiver on the tax, particularly the royalty regime.

“I think there is an understanding of the importance of Namdeb in the economy and in particular in terms of the jobs that are affected by the current short life of mine,” he said.

Namdeb recently sold its Elizabeth Bay Mine and associated marine assets as a going concern to Lewcor, a 100 percent Namibian-owned consortium.

Namdeb, which unsuccessfully explored a variety of options to extend the life of its Elizabeth Bay Mine beyond 2019, ceased operations in September 2018 because it could no longer run the operation economically.

Diamond mining generates 20 percent of the southern African country’s export earnings, but this could be under threat as Namdeb could close four mines by 2023 as many major onshore deposits have been depleted or are no longer economically viable to mine. Enditem

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