Diamond Mining in Namibia – Past and Present

This article is excerpted from http://www.ehudlaniado.com

A major diamond rush, located in Lüderitz (in the former German colony of Deutsch-Südwestafrika - German South West Africa) is among Namibia’s most famous diamond sites. In 1907, the Germen railroad worker, August Stauch, heard that there may be diamonds in the area and he asked railroad laborers to keep an eye out for sparkling stones along the railroads in the region.

One of the laborers, who previously worked at the Kimberley diamond mine, found a diamond. Stauch resigned from his job with the railroad company and launched a systematic search for diamonds. In 1908, after finding several stones that were confirmed being diamonds, a major rush for diamonds began.

The authorities established the Sperrgebiet (Prohibited Area), limiting entry to the entire region to licensed miners, prospectors and their laborers. This diamond mining area, located in the Namib Desert of southwestern Namibia, stretches from the Atlantic coast in the west to about 100 km inland, from the Orange River, on the border with South Africa in the south, to 72 km north of Lüderitz. It covers an area of 26,000 square km.

Although a desert, diamonds were found near the ground’s surface, in what may have been riverbeds before drying up. These were the early days of large-scale diamond mining, which required innovation on the part of prospectors. The Plietz jigs, Schiechel pots and electric shovels were invented during this period.

This article is excerpted from http://www.ehudlaniado.com

In 1914, as WWI erupted and after seven million carats of diamonds were mined in the region, diamond mining was halted for nearly a year, until South African forces conquered the region, ending the German rule over Southwestern Africa. In 1920, Ernest Oppenheimer consolidated the region’s pre-war diamond mining companies into a single entity called the Consolidated Diamond Mines of South West Africa, later to be renamed CDM, which became part of De Beers.

In 1923, CDM was awarded the exclusive right to mine diamonds in Sperrgebiet and it went on to discover diamondiferous rocks along the ocean beach by and north of Orange River, thus developing one of the longest mined diamond resources. Over nearly 80 years, the company mined 65 million carats of high quality large diamonds.

During the 1940s, as the mining emphasis moved to the shores and sea, CDM relocated its headquarters to the newly formed town of Oranjemund.

Modern Day

Lüderitz is currently a town that mostly benefits from tourism to the ghost towns left behind in the desert. The few remaining land-based operations are near Oranjemund, with several small satellite mines near Lüderitz and alluvial mines along the Orange River.

The majority of diamond mining in Namibia is marine mining, along the coast and a few km west into the sea. CDM was granted its first offshore mining license in 1961. This led to the development several innovations for mining in this new environment, including vacuum extractors, dredgers, floating treatment plants and probe drilling platforms. In addition, diamond mining ships were built to allow passage from the shallow waters of the coast.

In 1994, CDM and the Government of Namibia agreed to form a new company, Namdeb Diamond Corporation. The company is equally owned (50:50) by the Government of Namibia and De Beers. Under the agreement, all De Beers Group mining licenses in Namibia and all related rights are replaced by a consolidated mineral agreement.

Following a new agreement with the government, De Beers helped the country set up local diamond manufacturing operations. In 2007, De Beers and Namibia formed another joint venture, Namibia DTC. NDTC supplies diamonds to local companies for local manufacturing.

In November 2007, NDTC named 11 companies that will receive rough diamonds (a site) for a 3.5 year contract period ending in 2011. They received their first allocations in late October 2007. Another seven companies, which did not yet complete construction of their polishing facilities, began receiving supplies in late March 2008.

This project was part of a drive to expand Namibia’s diamond revenues by creating a related industry in the country. The plan was to supply ~$300 million worth of rough diamonds to local diamond manufacturers by 2009, nearly 5 percent of Namibia’s GDP.

Over the years, diamond manufacturers repeatedly reported losses and over time, they were authorized to export rough diamonds unsuitable for local polishing to other countries, such as India and China. Today, NDTC supplies 11 manufacturers with rough diamonds by NDTC in Namibia.

With over $1 billion worth of annual diamond production, Namibia is the world’s sixth largest diamond miner by value, according to Kimberley Process figures.

Trade in 2014:

Rough production: 1.92 million carats / $1.16 billion

Rough exports: 1.97 million carats / $1.11 billion

Rough imports: 147,527 carats / $192.5 million

This article is excerpted from http://www.ehudlaniado.com

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