The Namibian government is contemplating waiving the payment of royalties by De Beers’ Namdeb to extend the life span of its operations and save jobs.
Minister of Mines and Energy Tom Alweendo was quoted by Xinhua news agency as saying that discussions are at an “advanced state” with his finance counterpart Calle Schlettwein to waive the payment of royalties by the country’s largest diamond miner.
Namdeb is a 50/50 joint venture between the Namibian government and De Beers.
"The idea has not been to take of paying royalties completely but to suspend for some time to use that investment for the company to expand their onshore mining," Alweendo said.
"The idea is to save as many jobs as possible and in the process put ourselves in a position where we can get more royalties in future with prolonged operations instead of thinking short term."
Namdeb currently pays a 55% corporate tax on its profit and 10% royalty on its sales.
Diamond mining generates 20% of Namibia’s export earnings making it the largest taxpayer in the country.
Land-based diamond operations are projected to end in 2023 and will be no longer economical to continue under the current tax regime.
Its output decreased by 7% to 400 000 carats in the third quarter as the Elizabeth Bay land operations were placed on care and maintenance late last year.
The Elizabeth Bay Mine was recently sold to a local consortium.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
