Namibia to renegotiate diamond tradePublished by MAC on 2002-12-02
Namibia to renegotiate diamond trade
2 December 2002
Source: James Lamont, FT.com, Financial Times, posted on: email@example.com
What started at the beginning of the last century with German prospectors sifting sand on the Atlantic coast of one of the Kaiser's colonies has become the world's largest earth-moving operation.
Huge machines scour the earth for gems that will eventually make their way to jewellers in Europe and the US. Dredgers churn the sand and vacuum pipes suck at the blasted earth. Out to sea, ships at anchor pluck more gems from the seabed.
Colonialism is a memory in Namibia. But the Sperrgebiet, or high-security "prohibited area", has continued to be jealously guarded by De Beers, the global mining group.
Now Namibia is fighting back. Government officials say they will renegotiate an exclusive diamond buying agreement with De Beers to supply local diamonds to a fledgling polishing industry. Coming long before the existing agreement expires in three years, this is likely to infuriate the diamond cartel.
Namibia, the world's fourth-largest diamond producer, has begun flexing its muscles in a bid to have a greater say over what happens to its high-quality gems. The country has traditionally been one of De Beers' most secure southern African diamond producers, alongside Botswana and South Africa. The company, owned by the Oppenheimer family, has mined near the mouth of the Orange River for 80 years.
De Beers' joint venture with the Namibian government, Namdeb, sells its 1.4m carats production a year to the Diamond Trading Company, De Beers' marketing arm. The deal is worth about US $1.5bn to the government.