Namdeb Holdings Ltd, a joint venture between the Namibian Government and De Beers Group, said on Thursday that it has sold Elizabeth Bay Mine and its associated marine assets as a going concern to Lewcor, a 100% Namibian-owned consortium. Namdeb has explored a variety of options to extend the life of its Elizabeth Bay Mine beyond 2019, according to a De Beers press release, but ceased operations in September 2018, as Namdeb could no longer economically run the operation. Following the review, Namdeb concluded that the best way to secure a future for the mine was to find an operator suited to operate the mine in a sustainable way, ensuring continuation of employment and economic activities in Namibia.
The transaction has a value of N$120 million ($8.23 million) to Namdeb, with potential upside to N$180 million ($12.3 million), depending on a number of factors. In the longer term, this value could increase significantly, as Namdeb will share in the revenue earned in the sale of diamonds recovered from certain marine mining areas associated with the Elizabeth Bay Mine, and which Lewcor has indicated it will bring into production in the near-term. In addition, the transaction creates employment opportunities for those affected by the closure of the Elizabeth Bay Mine, and for the larger community and economy of Lüderitz and Namibia. The Elizabeth Bay Mine is located along the south-western coast of Namibia. Namdeb produced a total of 2 million carats in 2018, with sales of $274 million at an average of $550 per carat - one of the highest figures in the world. Production at the land operations increased by 34% to 0.6 million carats due to consistently higher grades, despite placing Elizabeth Bay onto care and maintenance in December.
"Choosing the right operator has always been an essential part of the decision, and Namdeb believes that the sale of Elizabeth Bay Mine to Lewcor Group – a 100% Namibian-owned company with the inclusion of Historically Disadvantaged Namibians at a level of 25% – will aid the transformation of the mining industry," De Beers writes. "Lewcor Holdings is an experienced and well regarded company in the Namibian mining and civil contracting industry, with over 20 years of experience. The sale followed a competitive process that attracted significant expressions of interest. The decision to sell to Lewcor Group was founded on the basis that it has sound technical and financial capability as well as the strong corporate social responsibility credentials, including a demonstrated commitment to Namibia."
Chris Nghaamwa, Chairman of Namdeb, emphasised: “Throughout this process, our objective has been to create the best possible circumstances for re-opening the operations, re-creating jobs and growing empowered participation in Namibia’s diamond industry. A rigorous, independently-advised process enabled Namdeb to select a company with not only the right mining and financial credentials, but also a commitment to meet future social and environmental obligations." Riaan Burger, CEO of Namdeb, said: it was the right thing to do for its future, its employees and the Lüderitz community at large.”