By Shinovene Immanuel
Namib Desert Diamonds (Namdia) has publicly called for new diamond buyers, but the parastatal insisted this week that its clients will remain a secret.
The state-owned enterprise has in the past been accused of secretly selling diamonds worth billions of dollars cheaply to Middle East companies.
However, mines minister, Tom Alweendo, instructed Namdia earlier this year to explain why they were not being transparent about their sales.
Namdia then placed adverts in the media last week, calling for potential buyers who want diamonds in bulk, to apply before 30 October 2018. This was a major reversal in how Namdia has sold diamonds since 2016 when it started operations.
Namdia spokesperson, Usi //Hoëbeb, told The Namibian yesterday that 10 companies might be selected to buy the gems from the state entity over two years.
He said Namdia currently sold diamonds to five companies, out of 20 companies that were secretively selected by the government in 2016.
//Hoëbeb said Namdia has received several requests from potential buyers.
“The [Namdia] board of directors had resolved to open up the process to new clients. This is the start of that process to seek new clients,” he added.
Asked whether Namdia would publicly announce the companies that would be picked to buy diamonds, //Hoëbeb said, “No, we will not”.
“Our clients thus far had preferred to remain anonymous, and for their own safety, we would not wish to compromise that,” he stated.
This is contrary to industry practice. Partially state-owned Namibia Diamond Trading Company (NDTC), which gets diamonds from Namdeb, announces the names of its buyers to ensure transparency.
//Hoebeb claimed that they received information that “unscrupulous elements” in society had targeted some of their clients in the past. He did not provide any evidence for this.
“We cannot risk that from happening in the future. We will, however, make this information available to our shareholder ministry,” he added.
People familiar with Namdia affairs said top officials in the mines ministry were sceptical about the latest Namdia strategy to advertise for buyers, and then keep them a secret.
Ministry officials, sources said, believe that it could be a smokescreen to continue selling to anonymous buyers.
Namdia’s annual report for 2016/17, tabled in parliament this year, showed that the parastatal bought rough diamonds from the NDTC – a joint venture between the government and De Beers – for N$750 million, and sold them for N$860 million, recording a profit of about N$110 million.
Sources said Namdia could have made more money if it had opened up its bidding process to more companies to buy at higher prices, instead of hand-picking buyers.
Namdia has been accused by industry players and diamond industry insiders of cheaply selling diamonds to Middle Eastern companies.
//Hoëbeb said a strict selection process would start after a background check process has been done to ensure that buyers were not involved in organised crime, money laundering, financing of terrorism and engagement in other financial offences, and also complied with international standards.
This new bidding process would enable Namdia to explore other potential clients, he added.
“Our new clients, going forward, must have a diversified profile so that we are able to sell all our stock without stockpiling,” he continued.
Namdia said requirements to be a buyer with the company include having a reliable business reputation, financial stability, experience in the trade of natural rough diamonds, must subscribe to the Kimberley Process, and have enough money to pay for the diamonds.
Another criterium is that the potential buyer should not be an NDTC buyer.
Mines minister Alweendo told Namdia’s leadership earlier this year that he was disappointed in the company’s way of operating.
“I told them (board) that I am not happy with the way some things are being done at Namdia,” Alweendo told The Namibian in June.
He also asked the board to explain why Namdia was not opening up the process of selling diamonds to maximise profits, instead of having only a few buyers.
“Namdia was after all started to discover prices,” he stressed.
Namdia has been the subject of investigations since it started two years ago.
President Hage Geingob has instructed public enterprises minister Leon Jooste to investigate the parastatal.
Sources said Jooste completed his investigation, and submitted a report to Geingob in June this year. That report has not been made public.
Three people briefed about this matter said several officials close to Namdia recently reported incidents of corruption, and the continued under-pricing of Namdia diamonds to Alweendo. It is not clear if the minister has taken any action about such incidents.
Namdia has denied allegations of corruption and under-pricing diamonds.