Namibian Diamond Factories 'On Brink of Collapse'

Finance and Trade
17/12/2015 08:48

Diamond cutting and polishing companies want the Namibian government to save them from collapse by cutting the price of rough diamonds the state supplies to them. "Time is running out. The industry is about to collapse," said Burhan Seber, managing director of Windhoek-based factory, Hardstone Processing. Seber, a former president of the Diamond Manufacturers' Association of Namibia, commented. "All we are saying is that there is a crisis in the industry. There is a rough pricing issue. The factories are now like ghost towns. The few factories in production are only trying to survive," he said.

Just four of 13 diamond processing plants are still operating. If the government does not come to their rescue, the rest of the factories will close, Seber said. Meanwhile, Ofer Babluki, the president of the Diamond Manufacturers' Association of Namibia, said the few factories operating are not making money. "Times are bad. Productivity is only at 5%," Babluki said. "At one time, companies were stealing workers from each other but now workers are on the streets."

Babluki said most rough diamonds supplied to local factories are not polished as it is expensive to do so. Therefore, Babluki said supplying cheaper rough diamonds would be a win-win situation for both the government and the factories. According to Babluki and Seber only 10% of the rough diamonds supplied to local factories are being cut and polished, with the rest either sold overseas or declined and returned to the Namibian Diamond Trading Company.