Africa-Press – Namibia. THE state-owned Namib Desert Diamonds (Namdia) plans to start auctioning some of its diamonds on the internet, but there are concerns that the parastatal continues to sell rough diamonds cheaply to buyers in Dubai and India.
Namdia, a 100% state-owned company, born out of an agreement between the government and diamond giant De Beers in 2016, was established to ‘test’ whether Namibia was getting the best income through the multinational by going onto the open market.
But question marks have always lingered around Namdia’s formation, especially since it was started by ministers accused of corruption in the past, such as former minister of justice Sacky Shanghala and former minister of mines and energy Obeth Kandjoze.
Critics believe that Namdia – led by Kennedy Hamutenya – is still being used to enrich a clique of individuals in Namibia and Dubai. Sources estimate that Namdia could earn between N$200 million and N$500 million in additional funds a year if it sold the stones to local companies that are allegedly willing to pay more than what foreign-based companies are paying.
Namdia’s spokesperson, Beverley Coussement, on Tuesday said the allegations that it sells diamonds for peanuts are “categorically untrue”. “In line with our current annual business plan, Namdia will soon be advertising for the procurement of the online trading platform, which will allow for competitive bidding methods, be it tender or auction, among others,” Coussement said.
She claims they are committed to continuously consider various selling methods to reinforce their price-discovery mandate. “The combination of the two methods would work best in the interests of Namdia achieving optimum prices while achieving regularity of sale and cash flow,” she said.
Botswana’s Okavango Diamond Company – the equivalent of Namdia – has been transparent in their sales and have for years publicly auctioned diamonds on the internet.
The Namibian reported in 2016 that Namdia sold diamonds in Namibia for US$500 (around N$7 100) per carat. But the same diamonds were then sold on at US$2 500 (N$35 600) per carat. This, sources said, has not changed, despite promises by politicians that underpricing was to be stopped.
Information seen by The Namibian shows officials at the Ministry of Mines and Energy have been informed as recently as last month about Namdia’s continuous trend of underpricing diamonds.
One of the companies that have benefited from the current Namdia regime is SBMH Group DMCC from Dubai, and London-based diamond dealer Neil Haddock, who also operates in Dubai.
Earlier this year, the mines ministry blocked a proposal by Hamutenya to appoint his sales manager to replace C-Sixty Investments as a diamond valuator.
“We propose that the current Namdia key accounts manager Andries Eiseb be authorised as valuer. This function is currently done by C-Sixty Investments,” Hamutenya said.
Industry players questioned Hamutenya’s move, saying it could increase secrets and the underpricing of Namibian diamonds. Eiseb and Haddock are former business partners.
Eiseb replaced Haddock and was appointed as Namdia’s key accounts manager. Eiseb has in the past worked and owned GDV Namibia, which valued diamonds, including diamond work in Zimbabwe. Namdia says there is no conflict of interest for Eiseb.
“In line with the internal company policy he has declared his interest. In this regard, he has since resigned as a director in GDV Namibia. Given his declaration, we don’t know of any other potential conflict of interest,” Hamutenya said.
Namdia has largely been a briefcase parastatal which has outsourced most of its work to private companies and individuals like Haddock. People familiar with this matter say foreign companies, such as SBMH Group DMCC, continue to gobble up a large chunk of Namdia’s rough diamonds, which that company sells on for profits.
For example, rough Namdia diamonds are set to be sold to India next week by Samir Gems, a private company there. Sources are pointing to that auction as an example of what Namdia should be doing, instead of operating like a briefcase company selling raw material.
Fears remain that Namdia could continue selling diamonds for peanuts if they don’t have an independent valuator to double-check the value of diamonds before they are sold abroad.
The current valuation is done by Nuska Technologies (previously known as C-Sixty Investments). That contract ends next week. Coussement said they will continue their operations without Nuska Technologies, which is currently owned by Israeli diamantaire Doron Cohen.
“Should Namdia require additional diamond evaluation services in the future, we will procure such services in accordance with the provisions of the Procurement Act.”
Coussement said they have always been in compliance with both the local and international regulations pertaining to the trade. “In addition, Namdia has the internal capacity to evaluate the diamonds, the value which we sell to our respective clients,” she said.
Namdia refused to reveal its biggest buyer, saying the information is confidential. Coussement said: “These diamonds are already valued by the government diamond valuator (an agent for the mines ministry) and De Beers representatives at NDTC before we buy them.”
The government’s current diamond valuator is Gems Diamonds, a company linked to Shanghala and former Investec Investment Namibia managing director James Hatuikulipi.
Hatuikulipi’s relative Paulus Ngalangi owns a 28% stake in Gems Diamonds through his entity Blackboard Enterprise CC. Nuska co-owner Cohen declined to comment when approached.
