Senior government officials expressed the need to change the existing agreement which would allow more value addition to diamonds produced by Namdeb.

Currently, Namdeb's diamonds are sold through the Diamond Trading Company (DTC), the De Beers marketing arm in London. Namibia contributes about 11 percent to DTC's advertising budget to promote diamonds worldwide.

The government was arguing that it wants to slash the advertising contribution and enter into a joint venture with De Beers to market the diamonds.

Responding to questions from opposition parties in the National Assembly Thursday on the status of negotiations on the new sales agreement, Minister of Mines and Energy Erkki Nghimtina told the National Assembly Thurday that "the african business negotiations have been very succesful" and the new agreement was expected by month end.

" As a result of the successful negotiations the local cutting and polishing sector will be able to benefit from rough diamond gems produced in Namibia [by buying them inside the country],” Nghimtina said.

He however could not give the exact details, but said it would be beneficial to the local diamond cutting and polishing industry adding that both parties were now working on the final details of the agreement before sealing it.

"The negotiations were rather protracted and very complex, all for a good reason because government wanted to make sure it gets the best deal possible," Nghimtina said.

The government has been in partnership with De Beers following the formation of Namdeb – a 50-50 partnership – in 1994. The last sales agreement was signed in 2000, which expired last year.

Diamonds account for 42 percent of Namibia's export revenue, 5 percent of government revenue and 10 percent of GDP.

Namdeb’s diamond production of 1.8 million carats last year was five percent lower than in 2004, according to De Beers' financial results for the period ended 31 December 2005. In 2004 Namdeb's production exceeded 1.9 million carats, which was one of the highest levels of production in the history of diamond mining in Namibia.