Debmarine Namibia says engagements are underway to secure an exemption from newly imposed diamond import tariffs by the United States government, which threaten to erode the competitiveness of Namibian diamonds in the world’s largest jewellery market.
“As an industry, we remain aligned to the World Diamond Council. Together with our shareholders and the Namibian government, we are engaging the US government to seek a blanket exemption on both rough and polished diamonds. The US does not produce diamonds, so these tariffs serve no protective purpose for American industry,” said Willy Mertens, CEO of Debmarine Namibia.
The tariffs, currently set at 15%, are applied to diamonds significantly transformed in countries such as Namibia and India.
Mertens warned that if an exemption is not granted, the additional costs will undermine Namibia’s beneficiation strategy and force US retailers to pay 15% more for Namibian diamonds, weakening demand in an already sluggish market.
“This is not a stable situation. Today it’s 15%, tomorrow it could be 30%. The unpredictability is creating massive uncertainty in the supply chain, and it directly impacts the competitiveness of Namibian diamonds against other global producers,” he said.
Faced with these external pressures and a prolonged decline in global diamond prices, Debmarine has scaled down its 2025 production forecast to 1.5 million carats, a reduction from the 1.8 million carats produced in 2023.
Despite this cutback, Debmarine’s output still accounts for 75% of Namibia’s total diamond production.
“We are currently looking at an outlook of probably getting to 1.5 million carats. I don’t think we can go less than that without compromising our operations entirely,” Mertens said.
Debmarine has seen its EBITDA fall from N$6.8 billion in 2022 to under N$1 billion in 2024, driven by a 45% drop in rough diamond prices since 2015.
Mertens noted that this has forced the company to implement cost-cutting measures, including the early retirement of two mining vessels, the Grand Banks and the Coral Sea.
“From quarter four of 2022, we started seeing a downtrend in diamond prices, and we had no choice but to respond by reducing volumes. The tariffs only add to the pressure on our margins,” he explained.
Adding to the challenges is the rapid growth of lab-grown diamonds, whose wholesale prices have dropped to US$114 per carat, while retailers continue to sell them for up to US$1,000 per carat, creating distorted market dynamics.
“The retail price has been sticky for us. Even though the wholesale price of synthetics has dropped significantly, retailers are still marking them up ten times. This is directly eroding the demand for natural diamonds,” Mertens said.
Debmarine and its partners are intensifying marketing campaigns such as Desert Diamonds and deploying technologies like Diamond Proof to verify natural diamonds. However, Mertens emphasised that trade barriers such as tariffs require urgent resolution to stabilise the sector.
“If these challenges are cyclical, there is hope. But if they are structural and we don’t resolve issues like the US tariffs, the entire industry is in for a prolonged struggle. That’s why securing this exemption is critical,” he said.
