Diamond miner Namdeb on Thursday announced that its board had approved a plan to extend the current life of mine (LoM) from 2022 to 2042, a decision expected to save approximately 2100 jobs and create 600 additional jobs.
Namdeb’s long term plan creates a LoM extension of up to 20 years for the company’s land-based operations and ensures the sustenance of its Southern Coastal Mine, through a balance of managing risk by using existing methods and incorporating new technology for improved safety and operational efficiencies.
“I can announce that Namdeb Diamond Corporation yesterday (Wednesday) obtained approval for its new long-term plan from its Board of Directors as well has the Namdeb Holdings Board of Directors. This will extend the current life of mine from 2022 to 2042,” Namdeb CEO, Riaan Burger said.
“To execute this plan, we as Namdeb also then sought royalty remission from the Namibian Government to enable the re-capitalization of the business over the next few years. Without the royalty remission, it would not have been possible to do the necessary investment that we require,” Burger said.
The new plan is not without sacrifices, with the government agreeing to a royalty remission which is expected to cost it close to a billion dollars in revenue over a five-year period.
“To safeguard the Namibian economy, it was imperative for the Government to decide and support Namdeb by granting royalty remission. This decision benefits the sustainability of the life of mine, the national economy as well as preserving employment for our people and the livelihoods of families that depend on it. It may have not been an easy decision to make in an economy that already was crippled by the negative impacts of the COVID-19 pandemic,” Mines minister Tom Alweendo said.
This comes as Namdeb had adopted a mine plan which concluded with the closure of the mine at the end of 2022.
So what does this all mean?
In a nutshell, Namdeb was facing closure, a development which will would have led to the loss of at least 2100 direct jobs and many more in indirect employment and also the likely economic collapse of the town of Orangenumd. The approved plan allows those jobs to be retained, the town to remain open, and the mine contributing to the fiscus.
Salient points of Namdeb’s new long-term plan
• Over the 20 years, it is estimated that an additional N$40 billion will flow into the fiscus as a result of the plan, with more contributed to the Namibian economy.
• Production will be ramped up over the next two and a half years to approximately 160% of the current capacity. This means a significant capital investment of approximately N$1.8 billion and similarly, a significant increase in operational cost.
• Namdeb’s long-term plan will result in 7.8 million carats being produced which amounts to revenue of N$159 billion benefit to Namibia and this requires approximately N$2billion capital investment over the three years.
• Approximately 2100 (1500 Namdeb employees, 600 contractors) jobs at Namdeb will be retained as a result of the life of mine extension and approximately 600 jobs are being added to enable the additional production activities.
• The plan supports the economic transformation of Orangenumd, providing an extended period during which it is enabled to diversify and develop new economic activities beyond mining such as tourism, agriculture and green hydrogen.
