The Bank of Namibia (BoN) has warned that ongoing challenges in the mining sector, particularly the diamond industry, could extend beyond 2024, potentially hindering the country’s economic growth.
BoN Director of Strategic Communications and International Relations Kazembire Zemburuka noted the sector’s struggles with reduced production volumes and falling international diamond prices, which have negatively impacted GDP growth throughout 2024 and are forecast to continue into subsequent years.
“The challenges facing the diamond mining industry are largely external, including low global demand, increased competition from lab-grown diamonds, and discounted pricing by diamond companies under international sanctions,” Zemburuka said.
He emphasised that as a small and open economy, Namibia has limited influence over international market dynamics.
In response to these pressures, the Bank of Namibia is taking measures to mitigate broader economic risks.
“The Monetary Policy Committee (MPC) reduced interest rates during its last two meetings in August and October 2024, aiming to support the domestic economy while safeguarding the currency peg between the Namibia Dollar and the South African Rand,” Zemburuka explained.
This comes as Namibia’s diamond production dropped by 14% in the third quarter of 2024, with total output reaching 0.5 million carats.
De Beers attributed this decline to a strategic decision to reduce production at Debmarine Namibia to better align with current market conditions.
Namdeb, on the other hand, offset some of this decline with improved recoveries and higher-grade mining.
“Production in Namibia decreased by 14% to 0.5 million carats, reflecting intentional action to lower production at Debmarine Namibia, partially offset by planned higher grade mining and better recoveries at Namdeb,” said the Group.
Debmarine Namibia, the group’s offshore operation, recorded a significant decrease in production, with output falling 30% year-on-year to 298,000 carats, down from 423,000 carats in Q3 2023.
This marks a similar 30% reduction compared to Q2 2024, when Debmarine produced 427,000 carats. Year-to-date (YTD), Debmarine’s 2024 production stands at 1.23 million carats.
Contrasting with Debmarine’s reduced output, Namdeb, De Beers’ land-based operation, saw a notable 48% year-on-year increase in production, delivering 158,000 carats in Q3 2024 compared to 107,000 carats during the same period in 2023.
Namdeb’s output also improved by 18% from Q2 2024 when it produced 134,000 carats, bringing its YTD 2024 total to 420,000 carats.
Overall, De Beers revealed that Namibia’s combined diamond production for Q3 2024 totalled 456,000 carats, a 14% decrease compared to the 530,000 carats produced in Q3 2023 and a 19% drop from the 561,000 carats produced in Q2 2024.
The YTD production for Namibia stands at 1.65 million carats, reflecting a 6% decline compared to the 1.76 million carats produced by this time in 2023.
This comes as De Beers Group’s global rough diamond production fell by 25% in Q3 2024, with output totalling 5.6 million carats.
