WINDHOEK, Oct 15 (Reuters) – Namibia’s central bank governor Johannes !Gawaxab called on Wednesday for an extension to a royalty discount granted to Namdeb to help the diamond miner through a protracted global market downturn, marked by falling demand and a supply glut.<\/p>\n
The rising popularity of lab-grown diamonds and a shift away from the precious stone among younger consumers are also weighing on rough diamond prices.<\/p>\n
Sign up here.<\/a><\/p>\n In 2021, Namibia cut its royalty rate from 10% to 5% until 2025 to help Namdeb, a joint venture between De Beers and the Namibian government, extend its land-based operations to 2042.<\/p>\n “It is important to support Namdeb during these difficult times,” !Gawaxab said during a press conference after the central bank cut its main interest rate<\/a> by 25 basis points to support Namibia’s weakening economy.<\/p>\n “As a country, it is important we support not only the companies, but its employees as well,” he added.<\/p>\n Extending the royalty relief would provide Namdeb with the necessary space to weather the economic storm currently sweeping through the diamond sector, he said.<\/p>\n De Beers argued at the time the discount was granted that given the age of the mines it was becoming difficult to maintain viable and profitable operations.<\/p>\n “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 headwinds in the medium-term,” !Gawaxab said.<\/p>\n Reporting by Nelson Banya; Editing by Alexander Smith<\/p>\n Our Standards: The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n