The direct cost of the slump in global demand for diamonds has resulted in the loss of over 1,900 jobs in Namibia, whose diamond sector has been hard hit by the global economic crisis.
There has been a scaling back of operations, which has meant no land operations for January, July, August and September; and no sea operations for January April, May and June. This has resulted in loss in tax revenue for the government. NDTC sight holders have stopped adding value to their diamonds and as a result have also let workers go. In addition, the indirect effect of the slump in diamond demand has expressed itself in the loss of jobs for contractors in the sectors. It is not foreseen that a noticeable change in demand will be observed before the end of 2010.
Namibia’s diamond production is estimated at just below 800,000 carats from 2.1 million carats recorded in 2008. This represents a contraction in output of close to 63 percent compared to declines of 48 percent and 60 percent projected in February and April, respectively.
Namibia’s primary industries are expected to contract by 27.0 percent in 2009, a downward revision from declines of 22.0 percent and 17.7 percent for April and February forecasts, respectively, according to the Bank of Namibia. This is mainly on account of declines in the diamond production. In 2009 and 2010 more diamonds are expected to come from offshore mining, as opposed to onshore mining.
