Namibia’s second oldest diamond mine, the Elizabeth Bay Mine, survived World War 1, the Great Depression, and World War II.
But will it survive the fight between the Namibian owners, Sperrgebiet Diamond Mining, and the Zimbabwean investor, RioZim?
The Elizabeth Bay Mine is environmentally fully permitted, with mining licenses valid until 2035/8 and a life expectancy of 10 years.
The annual carat production at Elizabeth Bay Mine between 1998 and 2018 ranged from 100,000 carats to 350,000 carats.
The average stone size during the same period ranged from 0.12 to 0.20.
The problem is that the Elizabeth Bay Mine has never enjoyed a full life since it started operating in the early 1900s. The latest spurt of life lasted just six months.
According to Gabi Schneider, Deutsche Kolonialgesellshaft Sudwestafrika started the mining operations at the Elizabeth Bay Mine as early as 1909.
World War I interrupted operations, and when they resumed, the area was under South Africa’s administration as mandated by the League of Nations.
The Consolidated Diamond Mines took over operations in the 1920s until March 31, 1931, when it ceased operations for the first time because of the economic depression.
Schneider says that at its peak, Elizabeth Bay Mine employed 1,200 workers and about 200 artisans.
Operations resumed in December 1945 but had to be stopped in October 1948 when production fell to 296 carats.
From 1957 through 1980, new technology was used for geological mapping of the area. In 1986, Consolidated Damond Mining set up a sampling plant at the mine.
Namibia attained independence in 1990, and the mine reopened in August 1991 under De Beers and the new government’s joint venture, Namdeb Holdings.
Seven years later, Elizabeth Diamond Mine operations stopped but came back to life in 2005 until 2009.
After an extensive sampling programme, the mine reopened in 2011, but Namdeb indicated in 2018 that the Elizabeth Bay Mine no longer fit into its business profile.
Namdeb put the mine under care and maintenance in September 2018.
The Lewcor Group owns Sperrgebiet Diamond Mining, which bought the mine in October 2020.
Sperrgebiet Diamond Mining was one of the contractors at the Elizabeth Bay Mine.
Namdeb sold the mine and its associated marine assets, including four onshore and offshore diamond mining licenses in the restricted diamond areas around Lüderitz.
The transaction had a value of N$120 million to Namdeb, with a potential upside of N$180 million, depending on several factors.
Lewcor Group has a 75% shareholding alongside two local shareholders, MSF Commercials and David Sheehama (20%), while an employee trust has 5% shares.
C.J. Lewis founded Lewcor Holdings in 1988.
Lewis started as a contractor for the Taiwanese company Overseas Petroleum Investment Corporation (OPIC), which was exploring the Etosha area.
Over the years, Lewcor has added construction and earth-moving equipment to compete in various construction projects in Namibia.
In June 2022, Sperrgebiet Diamond Mining announced that the Global Emerging Markets Group had invested most of its equity in the mine.
Among other investments, the resources division of the GEM Group holds mining and energy assets
in Zimbabwe.
Global Emerging Markets is a $3.4 billion alternative investment group that manages diverse investment vehicles focused on emerging markets worldwide.
The company paid nearly a billion Namibian dollars for a 78% stake worth US$58 million in the Elizabeth Bay Mine.
Namibian shareholders retained 22%, including an employee trust of 2%.
Indian billionaire Harpal Randhawa, who died in a plane crash in Zimbabwe in October 2023, owned Global Emerging Markets.
Randhawa’s Global Emerging Markets owns RioZim Murowa in Zimbabwe.
It was RioZim Murowa that acquired a stake in the Sperrgebiet Diamond Mine in May 2022, with plans to resume operations in Q4 of 2022.
The immediate next aim was to double production by mid-2023 by implementing an infield pre-treatment facility as the second phase.
The deal entailed that RioZim Murowa would invest N$100 million in the first phase and another N$200 to N$250 million in the second phase for unscaling production to 40,000 carats per month and carrying out offshore and onshore exploration within mining license 145 and the offshore licenses 128A and 128B.
The company started an aggressive recruitment drive to employ up to 180 people by the end of 2022, with a further increase during phase two.
The mine started operating in September 2022 and stopped in March 2023. The Elizabeth Bay Mine produced about 692,000 tons when it restarted operations.
On December 14, 2023, Lewcor filed for liquidation.
According to the Windhoek High Court papers, Sperrgebiet Diamond Mining lost N$205 million because the production was 83% below the target of 96,618 carats. Additionally, NamPower had disconnected the power supply by May 2023.
Lewcor approached the Windhoek High Court seeking an urgent order to stop RioZim Murowa from stripping the Elizabeth Bay Mine until the liquidation request has been heard.
Lewcor’s chief operating officer, Thiaan Lewis, charged that RioZim Murowa intended to strip the mine of all its movable assets without first paying off the debts, which stood at N$122 million as of May 2023.
“The transfer of Sperrgebiet Diamond Mining’s [SDM] movable assets is an attempt to grab an unfair advantage during the period between the submission of the request for liquidation of SDM and the granting of such an order,” Lewis said in his affidavit.
Lewis further said RioZim Murowa’s actions in stripping the mine harm Lewcor.
“Sperrgebiet Diamond Mining and RZ Murowa are trying to completely hollow out the mine, devalue it, and make it almost impossible to resume mining operations. If all the assets are removed, the mine will offer no value to a potential buyer,” Lewis argued.
Sperrgebiet Diamond Mining’s acting CEO, Abraham Grobler, said the assets were sold to RioZim Murowa in June 2023 because of an existing contractual obligation.
Grobler added that the assets included redundant, obsolete, or used items sold as part of Sperrgebiet Diamond Mining’s revised strategy to operate more profitably.
“Sperrgebiet Diamond Mining has no intentions of resuming operations as they were previously managed, and those assets are not essential to the intended downsizing,” Grobler explained.
The High Court of Namibia interdicted and restrained Sperrgebiet Diamond Mining from removing any assets, machinery, or equipment from the Elizabeth Bay Mine and taking them to Zimbabwe in February 2024.
