We caught up with Namdia CEO Alisa Amupolo to discuss her new role and how she understands the diamond industry. This article was published in our second edition of the Extractor eMagazine.
TEM: What was your impression of the Namibian diamonds at the JCK Show in Las Vegas?
Amupolo: JCK is the world’s largest jewellery exhibition. It was the very first time that NAMDIA exhibited in the US. As you know, 50% of the diamond consumption in the world ends up in the US market.
That’s why we thought it prudent for NAMDIA to understand the US market in depth. That’s where the biggest consumption is, and that’s where the biggest driver is. All the trends and conscious consumerism emerge from there. For example, there are over 2,5 million weddings annually. So, we wanted to get closer to the ecosystem. But most importantly, to engage vertically integrated clients who are Cartier polishers.
We wanted to tell the story of Namibian diamonds. Our diamonds are the best in the world, the queen of diamonds, because of their unique value proposition.
We are the only country in the world mining diamond offshore. It was fascinating because many conversations at JCK were mostly about Botswana. The Namibian story was less prominent despite our offering the best premium product in the world. So it was very exciting for us to be given a unique opportunity to get on the panel, which is difficult.
We were invited to talk about the transparency in the diamond supply chain and the incomes. We spoke about the value proposition of natural diamonds. We ensured that we collaborated with other stakeholders like the World Diamond Council.
After the JCK, we went to New York, where we met some of our clients. We also went to Grandview Klein, one of the few companies with Cartier polishing factories in New York.
We also stopped by our embassy to echo our experience, for them to be our eyes and ears, and to tell the beautiful story of the Namibian diamonds and how we are exploring opportunities to collaborate and have a signature in the US market.
TEM: Did you get the impression that the Namibian diamond is sought after?
Amupolo: We have always known that, but we have seen a gap between it being the best diamond and being known worldwide. That’s why we participated in Mine to Finger to say that consumers are becoming highly conscious regarding transparency, prominence and traceability in the supply chain.
They want to know where the diamond originated, who polished it, its impact on the economy, and how it improves people’s livelihood. We want to tell the story of the Namibian economy. They contributed 60% and accounted for 30% of export revenue.
We have seen the diamond’s transformation, and more work must be done. This is the story we went to tell the US market because they are very conscious about prominence. They are ethically centred, which is important because that becomes the Namibian diamond’s unique value proposition.
Our diamonds travel through the Orange River mouth and end up at the base of the Atlantic Ocean. There’s a form of natural polishing that comes with that journey. That’s why they sparkle. They are rare, and the fire in Namibian diamonds is unmatched. They are beautiful, and we want every Namibian to come and feel them and be brand ambassadors.
TEM: How do Namibian diamonds compare with the rest of the world?
Amupolo: Apart from having Namibian beauty in terms of pricing, they are premium. We have a combination of land recovery, which these days, with Namdeb life of mining extended to 2042, account for about 20%, and then you have 80% coming from the sea. So it’s like the land, the offshore account for 80%. We have seen that we have larger stones from land and smaller to medium stones from the sea.
TEM: So the large stone is Eumbo?
Amupolo: Yes, it’s Eumbo. We have also seen some bigger stones in the Atlantic Ocean, but at the end of the day, it’s a combination. The key is the value, the gem quality. It’s important to mention that all Namibian diamonds are 99% gem quality.
Others may have industrial quality, so from high colour, as we call it, to low colours, most of our diamonds are gem quality, making them unique. We don’t have a lot of industrial diamonds like countries like Zimbabwe or other economies, but our goods are ready to be manufactured, cut, polished and transformed into a finished jewellery product.
TEM: What is the difference between gem quality and industrial quality?
Amupolo: When we talk about industrial quality, we mean they are very brown, don’t sparkle. You cannot see through them, and they are not brilliant. The gem quality is brilliant and beautiful to watch. Like with Namibian ones, even though they are not polished, they are beautiful when you look at them.
TEM: This is your 10th month as Namdia CEO. Can you share your experience so far?
Amupolo: I am very grateful for the unique opportunities to serve Namibia and create value for one of the most highly sought-after and valuable commodities – diamonds. It’s been a remarkable experience. This is fairly new to me. The landing curve was unmeasurable when getting here. I got my rough diamonds evaluation course certification in my first six months in office.
Where I come from is more complex. I’m from an intersection between civil engineering and telecommunications. You have upstream, midstream and retail. That’s the model from which I’m coming.
In the diamond sector, you only have one line item. It’s sales and marketing. I found it simpler, but the ethical sensitivity of the stakeholder because of the nature of the diamond as a protected resource keeps us awake, ensuring that we manage the complex ecosystem of stakeholders and that our operations are above par regarding superior governance and ethics.
This is because any mistake could lead to removal from Kimberly Processing. When this happens as a country happens, you cannot trade, and the number of jobs the diamond industry contributes to is a huge responsibility.
It’s a huge indictment for us to ensure superior governance in whatever we do, adhere to the Diamond Act, and know whomever we do business with. We should also have a robust system. Of course, we need to open up our market to more clients, and we are looking at that and analysing that model, but at the end of the day, whoever we do business with must also be able to tell the story of the Namibian diamond.
TEM: You have gone through some training?
Amupolo: I went to the rough diamond academy in South Africa. Of course, when you prepare for a role like this, you need to have solid theoretical know-how.
We have to do induction and constitute a robust executive team. I came when the company was in a new strategic phase that rested on three pillars. One is ensuring we diversify our business model because price discovery is centric. We want to see how much premium value can the Namibian government fetch outside the De Beers.
Second, it’s business optimisation and refinement, ensuring superior governance underpins operation. As you know, as any baby crawling and taking off the ground, you are often faced with teething. We wanted to ensure we removed the ground of secrecy in our diamond industry. The third concerns robust stakeholder engagement and deepening our expertise across the pipeline. Making sure that, as Namibians, we are not only exporting commodities but we have developed the pipeline into downstream and jewellery so that we develop the industry.
TEM: How has the diamond industry reacted to you being the NAMDIA CEO?
Amupolo: The support has been tremendous. There is normally doubt when you enter a new industry. This is a known traditional industry. It’s an industry where people don’t leave. It has retention strategies. Many people say it’s a work-based industry. They have been receptive from the upstream, where we buy our diamonds. We buy our diamonds from NDTC. There is a sales and marketing agreement which NAMDIA.
We are responsible for 15% (rights to mine) production. We have engaged with NDTC. We have had a lot of support from stakeholders across all levels, whether upstream, midstream or downstream. We had the manufacturing association, a group of manufacturers that are cutting and polishing diamonds which is a very diverse group, so the support has been great. Also, we have yet to have women leading midstream, although, in the upstream, we had someone.
TEM: What should be changed to improve Namdia’s business activity?
Amupolo: First, we changed our sales model. We must dig deeper and see the more appropriate sales channel because now it is 100% competitive bidding. We will see the margin, but you know the market we work in may not always be the best model, so we have to look at other channels, ensuring we have a robust tender system, but that’s operation.
Let’s talk about the strategic aspect of the industry. Downstream beneficiation will play a very important role in Namdia’s function because we know that a lot of value can be created from diamonds, but we have also seen that goods are often shipped raw.
You want to incentivise people shopping in Windhoek, and those cutting and polishing here, those creating jobs, those capacitated in terms of skills have an opportunity to form part of our clientele.
Of course, these are the strategies we need to look at in terms of defining what plan of execution. But I was thinking of more local active people getting their hands in the pipeline and being active players. This industry has been largely internationally focused, so we would like to see more local people playing a part.
But also, you know, developing a facility where you can differentiate between rough and polished outlook, particularly jewellery. We want to hopefully contribute to the broad infrastructure to enable people to buy a Namibian diamond, whether it’s our client in the partnership or not.
TEM: Botswana is currently trying to get to negotiate with De Beers. What are your views?
Amupolo: As long as the government and De Beers are in a 50/50 joint venture, Namibia can test the market and see what premium value they can get from the 15%, similar to Botswana. Then now that we have demonstrated the value, it becomes easy for the government to negotiate for more. At some point, we could even fetch 22% margins above the point of selling value when we introduced the model.
This year in 2023, we recorded 15,3% margins above the standard selling value, and that alone is a golden thread; that alone can enable the government to go now and say now that I was able to fetch the premium value. Please give me more. How much is it?
Of course, a discussion is to be made with the government, but we can host up to 50% of Namibian diamonds, a Namibian stake. We are very equipped. Our wheel is oiled, and the capability, expertise, passion, and capacity can develop as you go because the industry changes. However, our passion as NAMDIA can create more economic value.
But let’s talk about the impact NAMDIA has made since its inception. It has invested N$40 million in social impact initiatives. Covid-19, we saved lives because we built an oxygen plant worth N$7 million. We were operating under three pillars – education, health and sports. When our Olympians, Christine Mboma and Beatrice Masilingi, went to compete, NAMDIA backed them up.
Our philosophy is taking rough gems and polishing them by unlocking their opportunities. We focus on the underprivileged. That’s mainly what our foundation focuses on. Social impact capabilities can be understated. Never mind the heavy bottom line and yielding dividends or declaring dividends to shareholders; we have impacted the social climate transformation project.
We can make an impact even with what we have as an industry. We can create jobs; we can educate. We have a lot of people still living in poverty, and you don’t want a country that produces the world’s best premium diamonds to have people going to bed on an empty stomach.
It is unacceptable, given that we have the best, so we are saying that the value of our diamonds must be commensurate to what they are worth, and everyone in Namibia must feel the impact of it. That’s what NAMDIA wakes up for every year; it’s to make sure they are premium value so that this returns the yields that we get through our share with the government and the NAMDIA foundations; we make a difference.
TEM: Do you have enough skills and technology?
Amupolo: This is a global industry, for starters. Even with our factories, many are part of the worldwide valuation chain. Of course, they are Namibian registered, but the point is that the capacity is there. The market is flooded with the volumes of what we are producing. We produce about 2,5 million carats per year, part of it goes to De Beers, and 300 comes to us. Then there is a mandatory 30%. that goes to value addition.
The capacity issue in terms of an organisation is not a question; it’s more about worth creation, making sure that more money stays in the country because we are the owners of this country.
The biggest challenge that I want to see change is capital. Diamond funding, there is no surety in this industry, so it’s extremely difficult for many entrepreneurs to penetrate this industry. So even though they enter the market, even when they end up with a majority equity partner, they die because our banking institutions still need to be structured to accommodate these kinds of business models.
Even though NAMDIA recently only got a guarantee from the government, we started with loan facilities. It can be challenging. Up to now, banks still ask for the amount of cash you hold because they don’t take assets as surety.
TEM: You can’t go to the stock exchange to raise capital?
Amupolo: There are opportunities for entities like NAMDIA to list on the stock exchange, but with 15%, it could be more sustainable. It’s too little.
TEM: What is the difference between Namdia’s role and that of NDTC?
Amupolo: We have a price discovery mechanism that, first, NDTC operates under a partnership. It’s a joint venture between the government and De Beers. There are three entities. Namdeb Holdings, which owns Debmarine and Namdeb. It seeks value in sales and marketing agreements because it primarily sells on behalf of the entire shareholder for De Beers and the government.
But of course, when you operate in a group of companies, you also have shared group service, and the managing partner there which is De Beers, also has its model; at the end of the day, you may erode value not intentionally, but because of the nature of the group operations whether goods are then sent to Botswana but also on aggregation NDTC gives first preference to local cutters 100%, but they also sell aggregated, and NAMDIA does not sell aggregated we sell unaggregated, meaning it’s 100% natural. Whereas they have a mix as well.
Unaggregated means that we only have a Namibian production. You don’t have Canada or Botswana, meaning it’s not mixed. It’s pure, and remember, because we have gem quality, a lot of people tend to use Namibian diamonds.
The relationship we build with those vertically integrated is important because we want the Namibian diamond story to penetrate from mining to the finger. We want to lose the essence of the value proposition somewhere along the value chain.
Our diamonds must be conflict-free. Although we are not the only country with alluvial, ours are conflict-free. Many other countries have alluvial but are not conflict-free, meaning they cannot trade them.
