The Ministry of Mines and Energy has imposed a moratorium on new diamond cutting and polishing licences, minister of mines and energy, Errki Nghimtina said this week.

The moratorium comes after last week's signing of a new five years sales agreement with De Beers which provides for 16% of De Beers' production in Namibia to be made available to local diamond and polishing factories.

“No pending or incoming licences will be considered until further notice. Though unlimited growth of the diamond sector would have been an ideal scenario, unfortunately, the quantity of diamonds available to ensure a viable and sustainable sector is a constraint that had to be taken into consideration,” said Nghimtina. He did not say how long the moratorium will last.

Last week, De Beers and the government announced the formation of a new company, Namibia Diamond Trading Company (NDTC), o supply rough diamonds from Namdeb to local factories. Namibia has currently 12 licensed diamond cutting and polishing factories.

The government and De Beers last week reached an agreement that will secure the sale of Namibia's diamonds through the NDTC until 2013. The new company - a 50:50 partnership between De Beers and the government - will be charged with the responsibility of valuing, sorting, selling and marketing of Namdeb's diamond production.

The NDTC will sell Namibian as well as DTC International aggregated rough diamonds to local cutting and polishing factories as well as export to DTC International.

It is envisaged that Namibia Diamond Trading Company will be the primary vehicle for the growth of the diamond beneficiation industry in Namibia. Expectations are that the level of turnover of local beneficiation could reach up to N$2 billion by 2009.