The Bank of Namibia (BoN) has expressed concerns that ongoing challenges in the mining sector, particularly in the diamond industry, may extend beyond 2024, posing a significant threat to the country’s economic growth.
Kazembire Zemburuka, BoN’s Director of Strategic Communications and International Relations, highlighted declining production volumes and falling international diamond prices as critical issues affecting GDP growth throughout 2024, with projections indicating continued struggles in the coming years.
“The challenges facing the diamond mining industry are largely external, driven by low global demand, increased competition from lab-grown diamonds, and discounted pricing by diamond companies under international sanctions,” Zemburuka explained.
He also pointed out that Namibia’s small and open economy has limited capacity to influence international market trends.
In response to these challenges, the Bank of Namibia has implemented measures to cushion the broader economy.
“The Monetary Policy Committee (MPC) reduced interest rates during its last two meetings in August and October 2024 to support domestic economic activity while maintaining the currency peg between the Namibia Dollar and the South African Rand,” Zemburuka noted.
Namibia’s diamond production dropped by 14% in the third quarter of 2024, reaching 0.5 million carats. De Beers attributed the decline to strategic production cuts at Debmarine Namibia to align with market conditions.
While Debmarine’s output decreased, Namdeb, De Beers’ land-based operation, partially offset the loss with improved recoveries and higher-grade mining.
- Debmarine Namibia: Offshore production fell 30% year-on-year, from 423,000 carats in Q3 2023 to 298,000 carats in Q3 2024. Year-to-date (YTD) production stands at 1.23 million carats, reflecting a similar 30% decline compared to Q2 2024.
- Namdeb: Land-based production rose 48% year-on-year, delivering 158,000 carats in Q3 2024, up from 107,000 carats in Q3 2023. This marks an 18% improvement from Q2 2024, with YTD output reaching 420,000 carats.
Overall Production Trends
Namibia’s combined diamond production for Q3 2024 was 456,000 carats, a 14% decrease from 530,000 carats in Q3 2023 and a 19% drop from 561,000 carats in Q2 2024.
Year-to-date, Namibia’s diamond production totals 1.65 million carats, reflecting a 6% decline compared to the 1.76 million carats produced during the same period in 2023.
This decline mirrors a global trend, as De Beers Group reported a 25% drop in rough diamond production in Q3 2024, with total output falling to 5.6 million carats.
Namibia’s diamond sector, a cornerstone of the national economy, faces mounting pressure to navigate these challenges and ensure long-term stability in the face of fluctuating global markets.
