Windhoek: A report that was commissioned by the Namibian government stated that it does not make economic sense for De Beers to set up another diamond hub in Namibia similar to the one recently established in Botswana.

Namibia was currently negotiating with the diamond giant to sell a certain percentage of gems mined in the country outside of the group’s trading and marketing system.

This demand from Windhoek followed Botswana’s success in arm-twisting De Beers to allow the country to independently auction a small share of diamonds produced by Debswana. Botswana’s state-owned diamond trader, Okavango Diamond Company started selling 13 percent of the country’s diamonds late last year after De Beers agreed to a new 10-year marketing deal.

The report titled ‘Beneficiation possibilities for Namibia’s minerals’, which was compiled by Raw Materials Group, had concluded that “it is considered to be more cost effective to expand existing facilities in Botswana than developing new centres (in Namibia)”, reports The Namibian newspaper.

However, an unnamed source privy to the ongoing negotiations dismissed the consultant’s gloom report.

“They are good with base and other minerals but clearly they know little about diamonds except what they picked up in literature,” the source was quoted as saying.

Namibia’s diamond commissioner Kennedy Hamutenya also told the daily that government was still optimistic about reaching a “win-win diamond deal” with De Beers in the next two months.

He said Namibia was trying to maximise benefits from diamonds but to do that, the country needs to create a viable and sustainable industry.

“We are not necessarily trying to duplicate what is happening in Botswana. We can never compete with them on volume, but we have quality to which we can add volume,” he said.

Currently, about 10 percent of Namibian diamonds were sold to local diamond companies while the rest are exported to Botswana.