Namco boosts ODM’s diamond output

Less than six months after its US$60-million takeover of Ocean Diamond Mining (ODM), marine diamond miner Namibian Minerals (NMR-T) reports a 30% increase in production from ODM’s operations off the coast of Namibia.

In the last two months of 1999, ODM produced 17,200 carats (95% of which are gem quality), up 30% from the same period in 1998. Namibian Minerals (Namco) says it boosted ODM’s production rates by increasing the supply of spares and dedicating all three of ODM’s vessels to mining.

For the first two months of 2000, Namco’s average realized diamond price rose to US$169 per carat from US$156 per carat in the last quarter of 1999. The company attributes the rise to strong demand and slightly larger stones recovered from ODM’s mining licence.

By acquiring ODM, Namco secured an additional 20,000 sq. km of ocean diamond concessions in Namibia, including the 362-sq.-km mining licence 36. Included in the deal were ODM’s three vessels and US$10 million in cash.

Currently on mining licence 36, Namco’s new 2,500-tonne vessel, MV Zacharias, is carrying out a 3,000-line-km geophysical survey of sediments up to 12 metres thick.

Namco will also spend US$4 million upgrading the MV Namibian Gem and MV Ivan Prinsep vessels over the next six months. The upgrade will include:

improvement of two airlift mining systems onboard MV Namibian Gem;

installation of security systems; and

complete engineering overhauls of both vessels.

Mining equipment on MV Oceandia was refurbished in March.

The company expects production rates from mining licence 36 to rise in response to three developments: the vessel upgrades; the deployment of Namco’s 140-tonne NamSSol mining system into the licence area; and the launch, in the second half of 2000, of Nam II, Namco’s next-generation mining system.

The MV Kovambo, the support vessel for NamSSol, is now mining lower-grade zones on the edge of the 2.4-sq.-km Halifax basin on mining licence 36. Within only a 0.46-sq.-km portion of the basin, ODM previously recovered more than 140,000 carats from sediments up to 3 metres thick.

Namco holds a 97.7% interest in ODM and has filed an application to delist the company from the Johannesburg Stock Exchange.

Namco reported net income of US$17.1 million on revenue of US$43.1 million last year, up from net earnings of US$3.1 million on revenue of US$13.1 million for a 7-month period ended Dec. 31, 1998.