Namakwa Diamonds

The Kimberley Process

Namakwa Diamonds adheres to the Kimberley Process, which is an unprecedented collaboration between Governments, NGOs and the diamond industry to stem the flow of conflict / blood diamonds.  Driven by lobbying groups such as Global Witness, the Kimberly Process was established to reassure consumers that by purchasing diamonds they were not indirectly financing war and human rights abuses, following decades of devastating conflicts in countries such as Angola, Cote d'Ivoire, the Democratic Republic of the Congo and Sierra Leone.

Under the terms of the Kimberley Process Certification Scheme (KPCS), participating states must meet ‘minimum requirements’ and must put in place national legislation and institutions; export, import and internal controls; and also commit to transparency and the exchange of statistical data. Participants can only legally trade with other participants who have also met the minimum requirements of the scheme, and international shipments of rough diamonds must be accompanied by a Kimberley Process certificate guaranteeing that they are conflict-free.

Historically disadvantaged persons in South Africa

As a result of the changing legislative environment in South Africa, Namakwa is obliged to comply with the requirements for black economic empowerment pursuant to the South African Mining Charter by 2014. Whilst the current legislative framework for such compliance is uncertain in several respects, the Mining Charter specifies a number of elements that must be complied with before a mining company can be classified as being a contributor to black economic empowerment. One of these elements is the entitlement of a company’s historically disadvantaged workforce to up to 15 per cent. of a mining project’s beneficial value by 2009 via a sale (potentially at a discount) and a total of 26 per cent. of such value by 2014, as determined by the Mining Charter. The sale to historically disadvantaged persons in South Africa is a stake (typically equity) in each individual South African mining project rather than a direct stake in the Company. In order to satisfy its obligations towards its historically disadvantaged workforce in South Africa, Namakwa has established an employee trust, and will utilise such trust to comply with the requirements of the Mining Charter, within the timeframes stipulated by legislation.

Mineral policy in South Africa, Angola, the DRC and Namibia

As a result of the changing legislative environment in southern African countries, where governments are creating opportunities for local beneficiation by increasingly imposing requirements to cut and polish diamonds in the country of origin, Namakwa has either obtained or is seeking to obtain trading and beneficiation licences in each of the jurisdictions in which it operates. In particular:

• in South Africa, Namakwa holds a licence permit through Namakwa Diamonds Trading (Pty) Limited to buy and sell rough diamonds in South Africa and a licence permit through Elite Diamonds to cut and polish rough diamonds in South Africa; and
  
• in Namibia, the company is beneficially interested in a 42.5 percent interest in Marine Diamond Manufacturing (Pty) Ltd, which holds a licence to cut and polish diamonds until 28 May 2014.
  
• Further details of the impact of local mining and beneficiation legislation on the Namakwa Group, including royalties, in each of the jurisdictions in which it operates can be requested via email: info@namakwadiamonds.co.za