A collapse in global diamond demand has wiped nearly N$13 billion from Namdeb Diamond Corporation’s net present value and slashed expected revenues by about 60%, forcing the company to embark on one of the most aggressive cost-cutting, technology and productivity drives in its history to safeguard a business that supports about 2,600 jobs.
Namdeb chief executive officer Riaan Burger said the natural diamond industry was experiencing one of its most severe downturns in decades, driven by weak global demand, geopolitical uncertainty, synthetic diamonds, and slowing economic growth in key consumer markets.
Only four years ago, the company announced a new 20-year business plan after proving that extensive diamond-bearing gravels remained beneath the Atlantic Ocean beyond its historic land-based operations.
The expansion plan was supported by reduced royalty arrangements with government and committed Namdeb to pushing mining a further 1.4 kilometres into the sea, maintaining employment for approximately 2,600 people and contributing an estimated N$40 billion to Namibia’s economy over the life of the project.
Burger explained that Namibia has no diamond-bearing kimberlite pipes. Instead, the country’s diamonds originated in South Africa and Botswana before being transported hundreds of kilometres downstream by the Orange River millions of years ago.
Over time, wave action repeatedly concentrated the highest-quality stones along Namibia’s coastline and offshore seabed.
That natural sorting process has resulted in approximately 98% of Namdeb’s production being gem-quality diamonds, among the highest-quality natural diamonds produced worldwide.
Burger said Namdeb’s current operation represents more than a century of continuous technological evolution.
Over the past 100 years, the company has recovered approximately 84 million carats from its southern coastal mining licence, while Namdeb and Debmarine Namibia together have produced close to 100 million carats from Namibia’s marine and coastal deposits.
Unlocking those resources required years of unsuccessful experiments, including specialised offshore mining equipment that Burger jokingly described as an “engineering marvel” but “an utter failure”.
Although those early attempts failed commercially, they generated the knowledge that eventually enabled successful probe drilling, advanced geophysical mapping and the coastal engineering techniques now used to extend mining beneath the Atlantic Ocean.
The company has already reclaimed about one kilometre of coastline by constructing massive seawalls, while moving more than 100 million tonnes of material every year and pumping approximately 415 million cubic metres of seawater annually to keep its mining areas dry.
Burger attributed the downturn to a combination of international trade tensions, geopolitical conflict, slowing Chinese demand, higher living costs in the United States, weaker jewellery sales, increased competition from laboratory-grown diamonds and higher gold prices, which have increased the cost of diamond jewellery.
He said the company had originally modelled a 20% decline in revenue during scenario planning but had never anticipated the scale of the current downturn.
Despite those challenges, Burger said there were encouraging early signs that the market was beginning to differentiate between natural and laboratory-grown diamonds once again.
He said the strongest recovery was emerging in larger, high-quality natural stones.
“The big stones are really what drives Namibia more than anything else,” he said.
Burger said recovery would also depend on rebuilding consumer demand.
De Beers has intensified its marketing campaigns in the United States, India and China through its Desert Diamonds campaign, promoting natural diamonds originating from Namibia while working with international celebrities and luxury brands to rebuild demand ahead of the important year-end jewellery-buying season.
The company has placed the Sendelingsdrif operation on care and maintenance, undertaken three rounds of voluntary separation, reduced staffing levels, frozen labour-cost escalation and worked closely with contractors to reduce operating costs.
It has also deliberately reduced its strip reserve, mining much closer to the active mining face to minimise waste movement and lower costs, even though that approach leaves the operation with less operational flexibility.
“We are running right on the edge with our strip reserve,” Burger said.
Technology has become equally important.
Namdeb has established a sophisticated remote operating centre that monitors equipment, vehicle movements, fatigue and production across its coastal operations.
The system has improved loading productivity by approximately 13%, while new surface miners, additional processing capacity and the introduction of the company’s first dry mining unit have dramatically increased operational efficiency.
Between 2022 and the end of last year, treatment capacity increased by 35%, the area of bedrock cleaned rose by 83%, and diamond production increased by 63%, all while maintaining broadly stable employment.
“If it wasn’t for this, we would have been dead,” Burger said.
Burger argued, however, that Namdeb’s greatest competitive advantage was neither technology nor engineering.
Long before the downturn began, Namdeb deliberately built a culture centred on employee participation, continuous learning, innovation and shared responsibility.
Rather than imposing corporate values from management, employees helped define the company’s culture, and staff are encouraged to pursue further education, experiment with new ideas, and learn from failure, provided safety is not compromised.
Responding to questions from delegates, Burger said technology had been one of the biggest drivers of productivity gains, particularly the introduction of surface miners.
He added that improvements in workforce performance had also contributed significantly, noting that female bedrock-cleaning teams initially outperformed male teams before the company adopted mixed teams supported by productivity-linked incentives.
“In the end, none of the improvements, none of the efficiency and none of the innovation happens without the right people,” he said.
