Debmarine Namibia could lay off as much as 100 employees as it retires two mining vessels, the Grand Banks and Coral Sea, ahead of schedule due to falling diamond prices and rising operational costs.
“Between the two vessels, we are talking about approximately 180 people, of which about 100 are Namibians. So far, we have been able to accommodate around 45 of them in other operations, but we are still busy with the exercise to see how best we can minimise job losses,” said Debmarine Namibia Chief Executive Officer Willy Mertens.
The vessels were originally scheduled for decommissioning in 2028 but each required N$500 million in maintenance — a combined N$1 billion — which Mertens said was financially unjustifiable given their marginal combined production of 200,000 carats and only three years of remaining operational life.
“We had to take the very difficult decision of retiring them early. If we went ahead with their maintenance, there was no way we would recover that cost from their remaining production life,” he said.
According to Mertens, the decision comes amid a 45% drop in rough diamond prices since 2015. Debmarine’s earnings before interest, tax, depreciation and amortisation (EBITDA) fell from a record N$7 billion in 2022 to just under N$1 billion by the end of 2024 — an N$8 billion decline from its peak.
“We are now producing diamonds at a price point that is 50% lower than what we were receiving in 2015. The market simply cannot absorb excess supply at these depressed prices,” Mertens said.
The Coral Sea, a chartered vessel, has already been returned to its owner, while the Grand Banks is docked in Cape Town and up for sale.
Mertens said Debmarine continues to invest N$130 million annually in workforce training and development but acknowledged that job losses are unavoidable under current market conditions.
“We started operations in Namibia with just 14% Namibians. Today, 92% of our workforce are Namibians, trained and educated by Debmarine. This is why these job losses are not taken lightly,” he said.
