The creation of the Namibian Diamond Trading Company (NDTC) is based on a 50x50 partnership between the Government of the Republic of Namibia and De Beers. The agreement, which resulted in the creation of the company, was signed in January 2007 and holds immense possibilities for the country in terms of the economic activity such a venture, is expected to generate. The purpose of the NDTC is to make diamonds available for sale in Namibia for local manufacturing.
Shihaleni Ellis Ndjaba is the CEO of Namibian Diamond Trading Company (NDTC).
Mr.Ndjaba holds a number of qualifications which include a Msc.Degree in Financial Economics from the University of London, an MBA from Brunell University in the UK and an Msc in General Maritime Administration from the World Maritime University in Sweden. Until January 2008 he was the Permanent Secretary in the Ministry of Works, Transport and Communication.
We asked Mr.Ndjaba to find some time to answer a couple of questions for our readers.
 
The number one and a very important topic at the moment is that many of the local jewellers are unsatisfied with the allocation of the rough.  Do you have any comment on that?
 
Yes, we are aware that there are some manufacturers that are unhappy with the rough supplied, and of course they came to make presentations in my office. We explained to them that this is a new arrangement in Namibia; it is the first time that rough diamonds are being supplied directly in Namibia . This is possible as a result of the agreement between the government and De Beers. We have to start somewhere and at the moment we are not in position to meet the demands of everybody.  From our assessment of the factories we are quite satisfied and believe that every little bit of rough that we have given will make a difference in Namibia comparing to the situation we had before. Unfortunately it is not possible to keep everybody happy but we are aware of the situation and doing our best by moving into a new direction, which will benefit Namibian economy. Diamonds are being produced and manufactured in Namibia which was not the case before. In other words, we take it step by step and will get there in the end.  I was recently at a conference in Israel and I must say that all over the world people are unsatisfied with the lack of rough diamonds. We should be happy with what we get for the time being and things will improve. 
 
Who is going to monitor the works of the cutting and polishing factories?
 
We have a good relationship and mutual understanding with our site holders who are manufacturing diamonds in Namibia and through supply of helpful information to us and our periodical supply of information to them as well as Ministry of Mines and Energy, we get all the information that we require in order to assess whether our policies and requirements are met.
 
Why have only 11 out of the 18 applicants been appointed official NDTC sightholders?
 
Of the 18 applications for supply that NDTC received, we are able to offer a 3,5 year supply contract to 11 of these companies following a rigorous objective assessment against the NDTC Criteria which, broadly, encompass a combination of an applicant’s competitive advantage in the category of goods requested and their ability to fulfill Namibia-specific beneficiation criteria. All applicants were assessed against the same objective criteria, but because of the finite nature of diamonds and our anticipated availability over the contract period we are unfortunately only able to offer supply at an economically efficient level to those applicants that performed the strongest against the NDTC Criteria, so we are not able to supply them all.
 
Do you plan to increase the amount of sightholders?
 
Currently we have a contract for 3,5 years and as is practiced internationally, we can only review that when the contract has run its course.  So, in other words, during that period of time there will be no change.
 
What is required from a company in order to become your sightholder?
 
We have several criteria that we use when choosing our sightholders, for instance, we have mandatory criteria that includes satisfaction of the following: financial standing and reliability, general business reputation, compliance with BPP and its associated Assurance Programme, a minimum turnover of 5 million American dollars, technical ability, distribution and marketing ability and so on.
Satisfaction of these minimum requirements is a mandatory condition of eligibility for supply from NDTC. As such, no weightings are attributed to them.
 
Do you have any advice for companies who want to become your sightholders?
 
Companies who want to become our sightholders must start preparing from today already to meet our requirements and to be able to face the stiff competition, whether it is a new company or an existing sightholder wanting to continue working with us.
 
How is the allocation process controlled and who decides on the amounts of rough to be allocated between the sightholders?
 
The allocation process is carried out by NDTC and also NDTC Board of directors.  We follow certain robust criteria when we allocate rough to and select our sightholders.
 
What are the rough needs of the sightholders?  What is the size of diamonds that they most require?
 
The sightholders require the best of the diamonds, but we have various sizes that we circulate to them.  The requirements differ from one sightholder to the next and we give them the opportunity to indicate their needs when they apply for rough.
 
What is the smallest size of diamonds that you supply?
 
I am not sure at the moment but roughly 0.10 carats.
 
What is the value of Namibia diamonds that will be manufactured locally in 2008?
 
It is estimated that up to 300 million US dollars worth of diamonds will be made available in Namibia by 2009.
10% by value of Namdeb’s total annual production will be made available for supply locally, defined by what is deemed to be economically viable by the cutting and polishing industry and by the amount Namdeb produces from mining operations. This 10% will be allocated as non-aggregated diamonds by NDTC. In addition there will be an allocation of aggregated diamonds from a variety of sources including Namibia . The composition will be reviewed by NDTC Board from time to time. This amount will represent close to 5% of Namibia ’s total GDP (Gross Domestic Product).
 
One company said that 10% is not enough for all sightholders and if that could increase up to 30%,  NDTC will still have more than enough.
 
 It should be enough because DTC selected their sightholders only a couple of months ago and, as far as I know, they are also complaining like our sightholders.
 
Why not supply more Namdeb mined diamonds to NDTC clients?
 
Based on the existing infrastructure and capabilities within Namibia this would be impossible to do in an economically sustainable way. Many of the diamonds mined in Namibia are not suitable for local cutting and polishing and need to be processed in countries with special equipment and skills. They are also of greater value to the Namibian economy when they realize top prices in those specialist markets.
Moreover the existing plans for expansion to 300 million US dollars show nothing less than a 10 fold increase in just 2 years. That is a huge increase and need to be managed very carefully to ensure the sustainability in the long term of the Namibian Diamond Industry.
 
What steps has NDTC taken to ensure that the rough diamonds it sells to license holders are actually manufactured in Namibia?
 
In partnership with the Ministry of Mines and Energy, in particular the office of the Diamond Commissioner which is responsible for the regulation of the Namibian Diamond Act and the Kimberly Process Certification, systems are in place to ensure that any diamond export from Namibia will be tracked. Any boxes sent out of Namibia for preparing will be monitored along with the returning prepared rough. Any client abusing this arrangement will be dealt with on a by basis in accordance with Government requirements. Continuation of the said practices could lead to reduction or even suspension of supply.
 
Is there any authority that controls the process of evaluation of the rough, a higher authority that oversees the work of NDTC?
 
 We follow a robust process which is very transparent.  It gets subjected to ombudsman International verification which makes sure that the process does not disadvantage anybody. Also, our sightholders who are unsatisfied have the opportunity to present reports to the Ombudsman and they can determine if there is any unfairness in the process.  NDTC, being an operation in the mining sector, falls under the authority of MINISTRY OF MINING AND ENERGY, which also oversees our projects in a way.  We are an independent company and are being managed by the Board of directors.
 
There are a few diamond trading companies in Africa. Is there one that shows the most potential, who is in the lead? Is there any cooperation between DTC-companies in Namibia, Botswana and South Africa?
 
I must say that the spirit of developing DTC’s in Africa is mostly to lead local beneficiation in the same way that we are benefiting in Namibia.  We are not being developed to be in a race with each other but to maximise beneficiation in our own countries.
We can cooperate but outside that cooperation we have our own framework of how we operate. My framework here is to sell rough diamonds to our sightholders and to DTC London.
 
 
When DTC transformed to NDTC, who benefited from those structural changes?
 
Previously DTC was concentrating on valuing NAMDEB’s production.
There is a new arrangement where NDTC markets Namibian production internationally and also locally which not the case was before. Local beneficiation is the most important thing. We are putting all our effort into developing a well functioning manufacturing industry in Namibia and through that exercise there is a creation of jobs and provision of revenue which will go for building roads, schools and other public institutions that are required in Namibia. In other words, this transformation benefits the people of Namibia, the government, the shareholders and of course De Beers because the profits are divided equally.
 
As in life there are bound to be challenges that we face and particularly in our industry. This is why it is important for us to work together to maintain the integrity of the industry.
The NDTC is committed to our sightholders and look forward to establishing and maintaining strong relationship and cooperation with both the local and international partners. I would like to also emphasise the importance of local beneficiation through adequate skills transfer.
Veronica Novoselova, Rough&Polished African bureau editor in Namibia