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Minimum diamond stake proposed for Namibians


THE Ministry of Mines and Energy has told parliamentarians that it intends to amend the law to allow not less than 20% of shares in diamond licences to be held by Namibian citizens.

Diamond commissioner Miina Aune-Gahutu made the revelation at a recent stakeholders’ engagement attended by members of parliament, where she said this was part of efforts to increase participation by Namibian citizens in the diamond industry.

She said the ministry had reviewed the Diamond Act of 1999, and came up with a number of changes in a proposed bill that will be sent to parliament.

“The proposed changes are aimed at effectively regulating diamond activities in the industry,” she said.

Diamonds mining in Namibia is a billion dollar industry with output at close to N$30 billion over the last five years and is largely controlled by the De Beers Group’s partnership with the government under Namdeb Holdings.

Aune-Gahutu said the aim of the review was to align the Diamond Act to relevant national, regional and international laws and policies; to harmonise the Diamond Act with industry best practices and to simplify the law.

The commissioner said although provisions are made in the act regarding the preferential treatment of Namibian citizens, products and services by diamond licence holders, this section has been expanded under the proposed bill to make provision for local content.

The employment of Namibians, the use of Namibian products and services, the training of Namibian citizens, and securing local supply of rough diamonds for polishing and other beneficiation activities will now be made part of the law.

“There is a growing public view that the country is not benefiting equitably from its mineral resources,” she said, adding that the term “empowerment beneficiaries” is introduced to align the law to the NEEB and the Mining Charter.

The diamond bill proposes that licences shall only be awarded to Namibian juristic persons as it is easier to monitor a licence holder when it is a juristic person as opposed to when a licence holder is a natural person.

“The ability to set up a juristic person is also indicative of the licence holder’s ability to fund their operations instead of getting licences for speculative purposes,” she said.

“This requirement can deter and limit applicants who have no intention of conducting operations but merely want to speculate with the licence,” Aune-Gahutu said.

The proposals also support mainstreaming into a formal economy, she added.

Other proposals include the abolishment of the Diamond Board and replacing it with the Diamond Advisory Committee which will advise the minister on matters relating to the diamond industry, and the control and protection of the diamond resources of Namibia.

“The Diamond Board was found to be unnecessary, overlapping activities, and that it has been incurring expenditure that could be avoided.

“It is recommended to do away with the board and instead allow the minister to appoint a Diamond Advisory Committee, should such a need arise,” said the commissioner.

It is not the first time the mines ministry has been pushing for the review of existing laws. In 2021, the ministry also introduced a mandatory 15% shareholding retention by Namibians upon transfer or sale of their existing licences.

The Chamber of Mines had strongly opposed this policy, saying it would disincentivise exploration by Namibian and foreign investors.

“The effective 15% free carry on such EPLs held by Namibian entities makes it unattractive for investors to carry this burden without proportionate local financial contributions to fund exploration expenditures. Investors will shy away from such transactions resulting in an unintended backlash and thereby defeating the very essence of intended empowerment,” the chamber had said.

Then the ministry did not agree with the chamber’s position and negated on reversing the call.

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