Thursday, June 20, 2024

Botswana must manufacture synthetic diamonds to avert the threats posed to our diamonds

The Botswana Guardian article ‘synthetic diamonds a threat-de beers’ (http://www.botswanaguardian.co.bw/latest-news/1285-synthetic-diamonds-are-a-threat-de-beers.html has stimulated this rejoinder. Since March 2014 a number of newspapers carried stories about the BIDPA research on the threat of synthetic diamonds to Botswana. But for me what stood out in the debate around the threat by synthetic diamonds were the comments by Mmetla Masire, Co-ordinator of the Diamond Hub- Relocation and Opportunities who is reported to have confirmed to The Business Weekly and Review newspaper (THE END OF DIAMONDS 20-26 June 2014) that ‘synthetic diamonds were eventually becoming a threat for Botswana’s diamond industry’ (paragraph 3 page 2). Though Masire acknowledged the threat of synthetic diamonds he ‘“strongly objected to the idea of Botswana joining the manufacture of synthetic diamonds. He said that it would be duplicitous to actively campaign against the infiltration of synthetics in the market and then deal in them on the other hand. “We have no plans of venturing in to synthetics; it will be hypocritical to trade in both. Unlike De Beers, we cannot trade in something we do not understand and I cannot tell you their reasons except that Botswana is not looking in to that’” (Page 4 last two paragraphs). I am not too sure whether Masire really thought through his comments and the use of words such as ‘duplicitous’, ‘hypocritical’ and ‘something we do not understand’ . ‘Duplicitous’ in Microsoft Word synonyms turn up words such as double-dealing, two-faced, tricky, deceitful, dishonest, disloyal, and unfaithful. Whereas ‘hypocritical’ which has some synonyms comparable to ‘duplicitous’ also adds words such as insincere, phony and false. The sum total of this words means someone who is deceptive in words or action. If Masire means what he says he is telling us that De Beers are duplicitous and hypocritical because they manufacture synthetic diamonds. This appears not to be far from the truth if the story by Sunday Standard titled “Botswana faces synthetic diamonds threat” (http://www.sundaystandard.info/article.php?NewsID=19577&GroupID=1) is anything to go by. The story states that “failure by De Beers to assure Botswana Government that it would not enter synthetic gem quality market is posing a serious threat to the country’s diamond driven economy, a study conducted by the Botswana Institute for Development Policy Analysis (BIDP) has shown. The study titled, “synthetic gem quality diamonds and their potential impact on the Botswana economy,” found that “In the recognition of the 25 year mining agreement for Jwaneng as well as the marketing arrangement with De Beers, the Government of Botswana had sought assurance that De Beers would not enter the synthetic quality gem market. De Beers did not provide such assurance.” Why did De Beers not provide any assurances? Duplicity maybe?
The study states that in response to this in the suite of agreements signed between Botswana and De Beers, there was an agreement on synthetics which provided that in the event that De Beers enters the gem quality synthetic market De Beers will market these gems in a 75-25 percent joint venture with the Government of Botswana,…”. Why is the agreement on synthetics not a 50-50 joint venture but 75-25? Is that not a sign that De Beers will enter the market for synthetics? Masire’s statement that ‘we cannot trade in something we do not understand’ was disappointing to say the least especially that Debswana- a De Beers/Botswana relationship- celebrated 45 years in 2014 yet our diamond experts plead ignorance or lack of understanding. Be that as it may, our partner De Beers has been acquiring knowledge about synthetics since the 1950s as recorded in a 1973 book “Oppenheimer and Son” by Anthony Hocking which discusses the threat of synthetic diamonds as follows: “But there was another threat, this time from across the Atlantic. The Americans had discovered how to make synthetic diamonds. This had always been the diamond trade’s biggest bogey: that one day someone would come up with a way of making artificial diamonds for cheaper than it cost to mine them. After more than a century of serious experiment in different centres, a Swedish laboratory, Allmann Svenska Elektriska Aktiebologet, had announced in 1953 that it had produced some 40 synthetic diamond crystals at a cost of more than ┬ú 150 000. They were tiny and discoloured, and at that cost represented no threat to the trade: the Swedish company did not even trouble to file a patent. But the success triggered great excitement across the Atlantic where General Electric had long been experimenting along similar lines. At last the company succeeded, and by 1955 devised a payable production method to exploit the discovery commercially. The United States government dropped a veil of secrecy over the whole project. To De Beers and the rest of the established diamond trade the news came as a bombshell. This was what had been feared for so long. There was already a diamond research laboratory in existence at Crown Mines established to explore new uses for Industrial diamonds. Harry now gave instructions to develop De Beers own process for making synthetic diamonds without delay. After three years of work De Beers laboratory- Adamant, as they had called it- announced it had succeeded. Working along its own research programme De Beers had synthetic diamonds. Initially there were no plans to exploit the discovery commercially… Harry decided then it would be worth developing synthetic diamond production on a commercial basis. As a first step De Beers set up a factory in Springs- and soon afterwards another in Eire, at Shannon.” (p 340-341) If indeed Botswana does not have knowledge about synthetic diamonds it is time Botswana to develop her own synthetic diamonds laboratory at Botswana International University of Science and Technology if we really want to be serious players in the diamond industry. ( If De Beers took three years in the 1950’s BUIST should take even a shorter time ). I don’t know much about synthetic diamonds but ours should be the best because we produce the best diamonds in the world from Jwaneng mine. To be fair to Masire, I know a lot of Batswana have limited knowledge on diamonds trade as it appeared we were only content with the money diamonds gave us. He is actually telling the truth. Most of us know next to nothing about diamonds compared to De Beers and I believe the situation must change given that a lot of investment has gone in to BIUST which must produce scientific knowledge and stop wasting time with their boardroom politics. It is clear that our partner De Beers knows a lot about diamonds and sometimes they do not tell us the whole truth. As two heads are better than one, is the time not ripe to make agreements with De Beers public so that Batswana with little knowledge of diamonds can think together against De Beers. It has always been a concern to some Batswana that the agreements between Botswana and De Beers are confidential/ secretive in nature. But given that there is a likelihood that De Beers’ dealings are ‘duplicitous’ and ‘hypocritical’ it might be necessary to make them more public than they are to allow for public debates, interrogations, assessments and evaluations which will help close any loopholes. Reasons often advanced for such confidentiality/secrecy of the agreements is supposedly because they are commercial. The decision to make them more public would not be that difficult given that as an example, the Southern African Customs Union (SACU) Agreements of 1910, 1969 and 2002 are available to the public in the SACU website http://www.sacu.int/. I actually studied 1910 and 1969 agreements in the first half of the 90s as a student of Economics at the University of Botswana. By the way SACU Revenues have always contributed significantly to the budget and have overtaken minerals as a major revenue earner for the country. What then is all this secrecy around De Beers, a private company, when agreements with SACU member states are public? By way of conclusion I would say there was a lot of media excitement that Botswana negotiators of the 25 year mining agreement for Jwaneng might somehow have out-smarted De Beers in among others allowing for the relocation of DTC to Botswana. I was actually surprised that De Beers were out-smarted by Botswana but it is only now that I realize that they (De Beers) had an ace under their sleeves being synthetic diamonds agreement at 75-25 per cent. This should tell us that De Beers will not just let go its control over world diamond market. As Botswana we should instruct BIUST to set up a laboratory to develop our own synthetic diamonds without the involvement of De Beers, otherwise we are going to be left behind in the diamond trade. *Views expressed are my personal opinions and not those of government where I am employed)

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