Sunday, June 23, 2024

Botswana cuts ties with Gemdax

Gemdax, the Antwerp-based diamond boutique that has been advising the Botswana government on the possibility of creating a diamond exchange, is abruptly winding-up its consultancy services after relations soared between the two parties.

Sources in Government Enclave said that “Botswana government has decided to terminate┬áthe contract” because┬áit was not happy┬áwith progress that has been made so far.

Last year, government engaged the diamond consultancy firm as it planned to expand its diamond beneficiation programme by putting in place structures that allow for diamond exchange.

“We have engaged a Belgian company to assist us with the work of establishing the diamond exchange,”┬áthe Ministry of Minerals, Energy and Water Resources announced last year.

The intention was to come up with “the best possible way of doing it” without repeating the mistakes made by other African countries.

The setting up of a diamond exchange was expected to directly challenge the De Beers’ DTC model that is currently used to trade Botswana production.

However, it was envisaged that government would┬á┬á┬á ?receive a quota of Debswana’s diamond productionÔÇöa 50/ 50 joint venture between De Beers and Botswana Government.
The quota was expected to form part of the renewal of the long awaited sale agreement between Botswana and De Beers, which is up for signing by the end of the year.

Through the setting up of the diamond exchange, the Botswana government┬á┬á did not want┬á┬á to play the role of “diamond dealer” in the role of South Africa’s State Diamond Trader. ?The exchange, whose details were being worked out┬á until recently when the┬á consultancy was scuttled, was expected to be based┬á on┬á Antwerp and Israeli models. ?Trade volumes are expected to start at around $500 million per annum.

┬á“You cannot go around telling people that you are going to start trade while you do not avail your produce to them. As such, we still have to go through a process of negotiation with our partners (De Beers),” said the Director for Mineral Affairs, Nchidze Mmolawa. ?The┬á Beers and Botswana government’s sales agreement was expected to have been renewed┬á last December, but the two parties have not yet concluded the negotiations. But now it is hoped that they would be wrapped up by┬á December or early January.

Under the brief that was given to the Gemdax, government was┬áproposing to have certain┬á percentage of Debswana production to be made available for sale on the open market. locally. ?“We would like to develop diamond trading in Botswana. What we have now is DTCB, which is all about buyers and polishers who do that for export. There is nothing much in terms of traffic volume,” Mmolawa said.

?Further, other plans to relocate the aggregation of all De Beers production to Botswana have stalled. The proposed relocation of the DTC operations from London to Botswana has seen the establishment of 16 sightholders.


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