TIRI MASAWI
Namibia is losing millions of dollars because state-owned company Namibia Desert Diamonds (NAMDIA) is locked into agreements to sell diamonds to three foreign buyers at fixed prices, even when market prices change.
The buyers are Samir Gems and SBMH Group from the United Arab Emirates (UAE), and Belgium-based AC Diam. They provide money upfront to help NAMDIA pay for diamonds. NAMDIA extended their existing arrangements while in the process of bringing in new buyers, with the decision approved by its former board of directors.
The deal comes as NAMDIA deals with the aftermath of a deadly diamond heist at its Windhoek headquarters in January 2025. Diamonds worth N$314.9 million were stolen in the robbery, which claimed the lives of NAMDIA protection officer Francis Eiseb and suspect Max Endjala.
NAMDIA says the heist affected its operations.
The company has also faced a downturn in the international diamond market and has been operating without its normal infrastructure.
The company has since relied on the three buyers to provide money upfront for diamond purchases. Namibia Business Review spoke to at least three diamond industry sources who said the fixed prices could mean Namibia misses out on extra income when diamond prices rise.
“The reality is that both NAMDIA and Namibia in general are losing a lot of money because of this,” one source told Namibia Business Review.
NAMDIA receives diamond parcels worth between US$11 million (about N$176 million) and US$15 million (about N$240 million) from the Namibia Diamond Trading Company (NDTC) each month for sale to its registered buyers.
Industry sources argue that the fixed-price terms leave NAMDIA exposed to changes in market value between the time a purchase price is agreed and the time the diamonds are sold.
Using an example of an agreed price of US$100 (about N$1,600) per carat, the source said NAMDIA pays US$91.50 (about N$1,464) after an 8.5% discount. If a buyer pays 11% above that amount, NAMDIA would receive about US$101.57 (about N$1,625) per carat.
That would leave a difference of only about US$1.57 (about N$25) above the original agreed price, according to the example.
The source said the arrangement could prevent NAMDIA from capturing increases in market prices during the six to seven weeks between the initial price agreement and the sale.
“If they are selling at a fixed price, where is the price discovery? Who knows what the real market value is at the time of sale?” another source asked.
NAMDIA’s spokesperson Beverley Coussement, said the company had to balance its commercial mandate with the operational constraints following the January 2025 security incident.
She said NAMDIA had relied on clients to pre-finance purchases because it lacked access to conventional bank financing.
“The opportunity to provide such financing was extended to all eligible clients, and the successful participants were selected on the basis of the most competitive and commercially advantageous offers received,” Coussement told Namibia Business Review on Monday.
She said the three-client arrangement was the outcome of that process and not an arbitrary decision to exclude other buyers. She added that a sustainable financing facility would help reduce the company’s reliance on client financing.
Coussement also disputed reports that the allocations were split 40%, 40% and 20%. She said each of the three buyers received approximately one-third of the relevant allocation.
NAMDIA’s buyer list, released on 7 July, contains 32 companies. The selection process involved 11 local companies and international applicants from Belgium, the UAE, India, Hong Kong, Israel, Singapore, the United States, Armenia and Zimbabwe. Only five Namibian companies were selected.
Industry sources have questioned the limited number of local firms on the list and raised allegations about some international buyers’ local business links. These allegations have not been independently established.
Coussement said buyers were assessed against predetermined, weighted criteria and that nationality was not the only consideration. She said NAMDIA’s Client Registration Policy supports local beneficiation, while the company must also secure the best possible commercial value for Namibia’s diamonds.
Former NAMDIA Board chairperson Justice Hausiku declined to comment, saying he was no longer a director and advising the newspaper to contact the company directly.
The key issue is whether NAMDIA’s need for financing after the heist is coming at a cost to Namibia’s diamond revenue. The industry source argues that fixed prices could leave the country unable to capture the full market value of its stones, while NAMDIA maintains that the arrangements were commercially justified and approved through its internal processes.
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