In 2017, a Mining Investment and Governance review report compiled by the World Bank highlighted Botswana’s lack of disclosure on mining contracts singling out diamonds as one of the minerals whose business dealings are conducted under heavy secrecy.
The report which was launched in the capital Gaborone called on Botswana to make details of its large mining contracts public. The report stated that such development will improve transparency in Botswana diamond dealings.
The Botswana government negotiates the terms and conditions of these agreements including the percentage of ownership stake it will purchase. The said contracts are not published and even the Auditor General is not allowed to audit these agreements.
In his presentation of the report, the then World Bank Group Consultant Nils Handler said that the Botswana government’s decision to keep the negotiation process around contracts for diamond mining and large integrated projects confidential was a cause for concern.
“The lack of disclosure of diamond and integrated project contracts has affected the scoring of transparency and accountability in license allocation,” reads part of the World Bank report.
While the call for transparency was mainly made to diamond players that existed at the time, a relatively new player in the sector, HB Antwerp says it is in support of ‘transparency’ in diamond dealings. HB Antwerp is a Belgian gem processing firm and trader which recently opened its doors in Botswana.
Rafael Papismedov, co-founder of HB Antwerp says the diamond trader has since simplified the traditional complex diamond supply chain to create a unique mineral infrastructure, using innovative technology and ensuring total transparency.
He tells Sunday Standard that before the arrival of HB Antwerp, “there was a notion that there should always be a winner and loser during diamond trading”. The winner-loser scenario and setting, according to Papismedov, was due to lack of transparency in the diamond industry.
“From the very beginning we recognised that achieving the type of transparency needed to restore consumer confidence in the diamond industry and the product would require a new, ambitious strategy. Copy and paste of what the industry was doing was not going to be helpful. We knew that only by focusing on new innovation and traceability would we obtain the desired transparency,” says Papismedov in a virtual call with the Sunday Standard.
He shares that following a two year trial partnership with local miner, Lucara, which has since turned into a ten year deal, HB Antwerp has made a huge step by joining forces with the Botswana government to re-invent the complete diamond value chain in African communities.
Papismedov says through a new partnership with the Botswana government which will see HB Antwerp sourcing rough diamonds from state owned Okavango Diamond Company (ODC), the two partners seek to maximise the value that flows back into the mining communities.
“We don’t do things the old way. We are building a comprehensive, secure ecosystem igniting a paradigm shift in the diamond industry and emphasising transparency rather than mystique,” says Papismedov.
While he cannot immediately shed light on the value of the 24 percent stake that the Botswana government acquired in HB Botswana, Papismedov says further details on the deal will be made public in some weeks to come.
“There was an alignment of interest between HB Antwerp and the Botswana government. Botswana saw potential in HB to get more of its people working in the diamond industry,” says Papismedov.
Apart from Lucara, Botswana has various large-scale mining, sales and marketing contracts with Anglo American’s diamond unit, De Beers. Through a joint venture, Debswana Mining Company, De Beers operates in Boteti region as well as Jwaneng where it mines the precious stones.
Papismedov says his company currently does not have any relationship with De Beers and that while it has set its eyes on the rest of Africa, the current focus is in Botswana where the intention is to empower the locals ‘transparently’.