By Shinovene Immanuel | 14 October 2016
A NEW government diamond company which is predicted to sell stones worth over an estimated N$2,1 billion per year, quietly started operating, amid concerns about the secrecy surrounding the selling off of Namibian resources.
Namib Desert Diamonds (Namdia) is a 100% state-owned company born out of an agreement between the government and diamond multinational De Beers signed earlier this year. The company will serve as a diamond sales and marketing arm of the state, but its operations have been largely secretive.The government normally announces heads of state-owned enterprises such as boards of directors and chief executive officers, but the state remained tight-lipped on the key aspects of this company until The Namibian enquired about it this week.
Mines minister Obeth Kandjoze confirmed on Wednesday that the company started operating on 18 April 2016, with Kennedy Hamutenya, the current diamond commissioner for Namibia, as acting chief executive officer.
Kandjoze said Hamutenya, as diamond commissioner, has experience in and knowledge of the diamond industry, and has served as the chairperson of the government negotiating team which lobbied De Beers for the decade-long diamond deal.
“Given the above, the line minister then seconded Hamutenya in an acting capacity to further the objectives of Namdia, while the board is putting together the recruitment framework for a more permanent CEO to be appointed,” Kandjoze added.
He said Namdia’s directors were appointed on 2 August 2016 for a three-year term. They include lawyer Shakespeare Masiza, who is the chairperson; and businesswoman Tania Hangula, the chairperson of the Development Bank of Namibia’s board, who will serve as the vice chairperson of the new diamond company.
Economist Lorentha Harases, who was appointed as a director at the National Petroleum Corporation of Namibia two weeks ago, is also part of the Namdia board.
The other two board members are former First National Bank human resources executive Florentia Amuenje and geologist Venondjo Maharero, who studied at the South Dakota School of Mines and Technology in the United States of America. He worked at Namdeb until last year. The Namibian understands that several well-connected business people lobbied to influence the appointment of the board.
According to the 10-year agreement between De Beers and the government, the partnership company known as Namdeb Holdings will channel 15% of its total diamonds to Namdia.
The Namibian understands that the 15% is worth around U$150 million, which is equivelent to around N$2,1 billion each year.
“Yes, the company (Namdia) has received its first purchase entitlement from the Namibia Diamond Trading Company (NDTC) during September. It received 15%,” Kandjoze said.
Asked whether the stones have been sold, the minister replied, “Yes, the company sold the entire diamonds received from NDTC”. However, the secrecy surrounding the entire affair means that the public has not been informed about how much the government received from the sale of those diamonds, where that money is and how it will be used.
In 2007, the Namibian government and De Beers launched a subsidiary, NDTC, to supply rough diamonds at a discount to selected customers, known as sightholders, for three and a half years.
Kandjoze said Namdia is not a duplication of NDTC.
“Namdia will for the first time in the entire history of the Namibian diamond industry be selling exclusively Namibian diamonds, with the primary objective of price discovery that will be used to inform government diamond policy, going forward. Based on the above, clearly, this is not a duplication,” he added.
Unlike NDTC which publicly advertises its main diamond beneficiaries, Namdia appears to be extra-secretive. Kandjoze maintained that Namdia selected beneficiaries from known international diamond dealers. He declined to name them.
“This information is proprietary and is bound by confidentiality provisions between the parties to the agreement, and as such, it is protected information. By divulging that information, it will end up with the competitors, which will not be in the best interest of the company,” the minister stated.
Kandjoze said Namdia has a mandate to sell to whoever in the international market, with the objective of getting maximum returns. He strenously denied that government has been secretive about Namdia, because the signing of the agreement was done publicly and reported in the media. He further claimed that he also answered questions in parliament regarding Namdia.
The appointment of the permanent CEO is set to be made before the end of the year, and it will be publicly advertised.
Cabinet passed a policy in August this year which states that all commercial public entities will fall under the Ministry of Public Enterprises.
However, according to Kandjoze, Namdia reports to the mines ministry.
“If that (change of reporting) is to happen, that decision will be made by government, and the public will be informed, if it is at all a requirement,” he added.
An expert described the secrecy surrounding the diamond company as worrying. In fact, the source said, as it is, the company might be known as an “exclusive club for the super-special” to get diamonds because of the lack of transparency.
