Central bank lobbies for Namdeb royalty remission
The Bank of Namibia (BoN) has urged the government to consider extending a royalty remission granted to diamond miner Namdeb in light of challenges the sector faces from the emergence of lab-grown diamonds, to enable the company to continue meeting its obligations.
BoN governor Johannes !Gawaxab argued that it was incumbent on the government to show its support for Namdeb, which is required to pay a 10% royalty on turnover and a 55% corporate tax on profits.
For the financial year ended December 2024, Namdeb reported a loss of N$79 million, figures obtained from the Chamber of Mines of Namibia show.
The government granted Namdeb a royalty remission in 2023, allowing the miner to reinvest monies that would have been paid in royalties into ongoing accretion activities to ensure the continuance of its operations as it mines further into the ocean.
Cash-strapped
“Domestic diamond mining companies remain cash-strapped due to debt servicing obligations, falling revenue and key investments to enhance efficiency. As a result, the industry is facing medium-term headwinds,” !Gawaxab said. “It will require support from authorities going forward in the form of a royalty relief, which is due to end at the close of 2025,” he added, lobbying for assistance for the sector.
Extending the remission, !Gawaxab said, would allow Namdeb to weather the current storm in the diamond sector. “It is important to support Namdeb during these difficult times to ensure it continues operating. As a country, we must support not only the company but also its employees,” he emphasised.
Following the grant of the remission in 2023, Namdeb said it was able to invest around N$1.3 billion into operations until the end of 2024. Over the next ten years, about N$3 billion is expected to be spent on operating costs. The government’s temporary loss of approximately N$1 billion would, in turn, allow Namdeb to contribute an estimated N$159 billion to the Namibian economy over the extended life of the diamond mine on the south coast until 2042.
The company added that 1 500 permanent jobs and 600 contract positions will be protected, while an additional 600 jobs could be created, highlighting the importance of the royalty remission.
BoN governor Johannes !Gawaxab argued that it was incumbent on the government to show its support for Namdeb, which is required to pay a 10% royalty on turnover and a 55% corporate tax on profits.
For the financial year ended December 2024, Namdeb reported a loss of N$79 million, figures obtained from the Chamber of Mines of Namibia show.
The government granted Namdeb a royalty remission in 2023, allowing the miner to reinvest monies that would have been paid in royalties into ongoing accretion activities to ensure the continuance of its operations as it mines further into the ocean.
Cash-strapped
“Domestic diamond mining companies remain cash-strapped due to debt servicing obligations, falling revenue and key investments to enhance efficiency. As a result, the industry is facing medium-term headwinds,” !Gawaxab said. “It will require support from authorities going forward in the form of a royalty relief, which is due to end at the close of 2025,” he added, lobbying for assistance for the sector.
Extending the remission, !Gawaxab said, would allow Namdeb to weather the current storm in the diamond sector. “It is important to support Namdeb during these difficult times to ensure it continues operating. As a country, we must support not only the company but also its employees,” he emphasised.
Following the grant of the remission in 2023, Namdeb said it was able to invest around N$1.3 billion into operations until the end of 2024. Over the next ten years, about N$3 billion is expected to be spent on operating costs. The government’s temporary loss of approximately N$1 billion would, in turn, allow Namdeb to contribute an estimated N$159 billion to the Namibian economy over the extended life of the diamond mine on the south coast until 2042.
The company added that 1 500 permanent jobs and 600 contract positions will be protected, while an additional 600 jobs could be created, highlighting the importance of the royalty remission.
