1 September 2009
By Jo-MarÉ Duddy
Agreements paving the way for Namibia to share in India's US$30 billion nuclear industry, as well as their world-class diamond polishing sector, were signed between President Hifikepunye Pohamba and Indian Prime Minister Manmohan Singh in New Delhi yesterday.
An agreement on co-operation in the field of peaceful uses of nuclear energy and a memorandum of understanding on geology and mineral resources are the first steps towards selling uranium and diamonds to India.
It also ensures a training institute for diamond processing in Windhoek, Mines and Energy Minister Erkki Nghimtina told The Namibian from India yesterday.
Nghimtina, part of the 43-member presidential delegation, said Namibia can export uranium oxide to India now that the country is no longer subject to the embargo on international nuclear trade.
However, that does not mean that India will receive special favours and be allowed to join the hunt for uranium locally, he said. 'The moratorium on granting exclusive prospecting licences (EPLs) for uranium is something completely different,' Nghimtina said.
Reports in the Indian media suggest differently, though.
According to The Economic Times, 'sources said that discussions on uranium mining and supplies have been ongoing with Namibia for some time now', and the MoU 'will give India the opportunity to tap Namibia's rich mining sector'. 'This includes the chance to get exclusive prospecting rights and the possibility of joint ventures in the sector,' The Economic Times reported yesterday.
India's nuclear market is expected to grow to US$150 billion in the next 30 years. Media reports also suggest that the MoU has secured an additional market for Namibia's rough diamonds, a statement which, according to Nghimtina, 'is not 100 per cent true'.
'India and Namibia are on the verge of signing a MoU that will give India access to Namibia's diamond riches. Such an agreement will give India direct access to diamonds, decreasing its dependency on major producers,' a report on the website of the International Diamond Exchange (Idex) said yesterday morning.
Namibia recently took the unusual step to bypass the Diamond Trading Company (DTC) and sell a significant chunk of Namdeb's stockpile to Diamonds India Limited (DIL) to relieve the local diamond giant's cash flow problem.
The Economic Times referred to the deal, hailing Nghimtina for his 'bold initiative', and said the consortium of 58 leading diamond and jewellery manufacturers 'is in continuous need of rough diamonds for their processing factories, even during recession'.
'Currently, DIL, to fulfil its continuous demand of diamonds, is willing to enter into contracts to purchase rough diamonds on continuous basis and sometime in large quantities,' The Economic Times said, adding that DIL will set up the training institute for diamond processing in Namibia.
The collapse of Namdeb's traditional markets at the end of last year due to the global financial storm has brought the company to its knees. The latest information showed that diamond production from January to June fell by more than 60 per cent compared to the first six months of last year.
The spill-over effect of its financial woes is one of the main reasons that Namibia has hit a recession, analysts said. Although Namdeb's diamonds are sold to the DTC, Government has left a back door open in the Diamond Act of 1999.
Section 58 gives the Mines and Energy Ministry the right to force producers like Namdeb to channel their rough diamonds to local processing plants, while Section 59 allows Government to sell up to ten per cent of a producer's rough diamond directly to the market.
'It's not all about Namdeb,' Nghimtina told The Namibian. There are other diamond mines in the country, like Samicor, that can deal directly with India. Besides diamonds and uranium, defence issues are high on the presidential agenda too.
Pohamba and Manmohan also signed a memorandum of understanding on defence cooperation yesterday.
The Economic Times contacted Namibia's High Commissioner to India, Martin Kapewasha, for more detail on the agreement. He was only willing to confirm that 'defence deals' would be discussed.
India and Namibia furthermore signed a bilateral agreement regarding communication, as well as an MoU related to exemption from visa requirements for diplomatic and official passport holders.
