Kenzoll Capital has partnered with MSF Commercials to restart the former Elizabeth Bay diamond mine near Lüderitz, with investment in the operation expected to eventually reach US$50 million as the partners expand beyond diamonds into critical minerals.
The Dutch private equity and special situations investor said on Wednesday that the partnership will seek to bring Sperrgebiet Diamond Mine (SDM), formerly known as Elizabeth Bay, back into production after the operation spent much of the past eight years inactive.
SDM’s licences cover 245,364 hectares within Namibia’s restricted diamond mining area and contain a combined 10.5 million carats of reported diamond resources.
Of this, 6.3 million carats are onshore resources while another 4.2 million carats are offshore.
The partnership also intends to explore the licences for heavy mineral sands and critical metals, opening a potential second phase of development beyond the mine’s traditional diamond operations.
Kenzoll said these commodities have not previously been explored on the licences.
The investor has already committed more than US$10 million to Namibia and said its immediate focus is restoring the mine as an employer and contributor to the economy around Lüderitz.
Subject to regulatory approvals, total investment is expected to increase to US$50 million as exploration and potential production of additional minerals progresses.
Kenzoll Capital chief executive Corné Melissen said the investment was intended to return the historic operation to production while creating a broader mineral business from its licence portfolio.
“Elizabeth Bay has spent most of the past eight years out of action and we’re committed to getting the mine producing again, providing jobs and economic value to an area that has relied heavily on diamonds for over a century. This partnership is part of our long-term commitment and investment in Namibia, with diamonds as the starting point and critical minerals to follow,” Melissen said.
Elizabeth Bay is situated south of Lüderitz within the Sperrgebiet, an area at the centre of Namibia’s diamond industry for more than a century.
The mine was previously operated by Namdeb before production was halted in 2018. Namdeb subsequently sold the operation to Lewcor Group in 2020, after which it was renamed Sperrgebiet Diamond Mine.
The latest investment comes as Namibia’s diamond industry faces pressure from weaker global demand and declining export earnings.
Diamond exports fell from N$5.1 billion in the fourth quarter of 2022 to N$1.7 billion during the first quarter of 2025, according to figures cited by the partners, while the Bank of Namibia has warned that weaker diamond export earnings pose a risk to economic growth.
The proposed restart would therefore return another producer to Namibia’s diamond sector at a time when the industry is navigating difficult market conditions.
SDM director Conan Mlunga said the partnership would combine foreign capital with local mining expertise.
“SDM holds a strategic asset in a part of the country that requires investment. The entry of a significant investor in the form of Kenzoll to support the Namibian Government priorities is a sign of the attractiveness of Namibia as a mining jurisdiction. Their support of MSF and by extension SDM will combine international capital and local expertise to get the mine back up and running to build value beyond diamonds,” Mlunga said.
The proposed US$50 million investment will not be limited to restarting diamond production. The partners intend to assess the wider mineral potential of SDM’s extensive licence area, particularly heavy mineral sands and critical metals.
That could materially change the scope of the historic Elizabeth Bay operation if exploration establishes commercially viable deposits.
The immediate challenge, however, will be completing the required regulatory processes and returning the existing diamond operation to sustainable production.
The partners did not disclose a firm restart date, expected annual diamond production, the number of jobs that could be restored, or how much of the planned US$50 million would be required specifically for the diamond restart.
