Thursday, January 21, 2021

Botswana punches the air as diamonds come home

Botswana celebrated last week as the country moved closer to being the world diamond capital when the fledgling DTC Botswana signed its median three year contract with its first 16 sight holders.
The new move is aimed at meeting the country’s quest of being the “best diamond address in the world”, both as the world’s leading producer, marketing, sorting, valuing and aggregation of diamonds by 2011.

“Today is a momentous day for Botswana and its citizens. It is expected that US $ 360 million (P 2.1 billion) of rough diamonds will be sold by DTC Botswana to sight holders in 2008, with this amount set to grow to US $ 550 million by 2009. The purpose of this agreement is to maximize the long term value that Botswana derives from diamonds,” Acting Permanent Secretary in the Ministry of Minerals, Kago Moshashane, said.
Moshashane led the Botswana negotiating team on the eve of the renewal of the Jwaneng mining lease and got a concession from De Beers to set up DTC Botswana responsible for sorting, valuing, marketing and, ultimately, moving aggregation activities from London to Gaborone.
The new developments, which are coming up with a package of Botswana based diamond cutting and polishing companies, will create 3000 new jobs which are directly linked to diamond manufacturing.

“We are very excited about this. Creating 3000 jobs is not a joke. And the transfer of technology here is not a joke either,” Moshashane told The Sunday Standard.

While the process of aggregation will not come immediately at the start of the threeÔÇôyear contract, which commences in March 2008, plans are being put in place by Brian McDonald, the head of DTC Botswana ÔÇöa 50/50 joint venture between De Beers and Botswana.

McDonalds is keeping his midnight oil burning to ensure that part of the aggregation starts here as early as 2009.

His assignment is expected to give Botswana a grip on both locally and internationally produced diamonds, which is a status that has been enjoyed by London over the last 300 years.

Already, Botswana, through its four mines owned by DebswanaÔÇö a 50/50 joint venture with De Beers, is the world’s leading producer by value, having recorded 34 million carats at its last reporting period year ÔÇö equivalent to 30 percent of world’s production.

“We will start with a full sorting, valuing and marketing and once we have achieved that we will look at aggregation,” McDonald said.
The move will enable DTC Botswana employees to gain enough experience and skill before the transition of moving operations from London to Gaborone.

According to the plan, De Beers world-wide rough diamonds production will start to be sorted, marketed and aggregated from Gaborone starting in March 2011. At the same time, DTC Botswana will serve all De Beers sight holders, including the state diamond commissioners from the neighbouring countries.

Presently, 70 out of 94 De Beers’ current sight holders, fearing being removed from the sight holders list, have established operations in southern Africa and both the Namibian and South African governments have already expressed support for aggregation that will be done in Botswana. Most of the sight holders in southern Africa are from Belgium, Israel, India, London and the United States. But the majority of sight holders from Mumbai and Dubai have not yet invested in the region and they are likely to be dropped from De Beers’s sight holders’ list by next month.
“Aggregation goes beyond Botswana diamonds,” Varda Shine, head of DTC London and chairperson of DTC Botswana board said.

The development will mean that all De Beers production from Canada, Namibia and South Africa, including other potential mining areas like Angola and DRC, will come to Gaborone for aggregation.
The relocation of sorting, marketing, valuing and aggregation to Botswana is expected to come with added benefits to the economy and these include employment creation ÔÇô directly and indirectly- linked to cutting and polishing. And other areas will include banking. Antwerp Diamond Bank and ABN AMRO, both Belgian banks, have been in the country to do a scoping study aimed at opening operations here to finance diamond operations at downstream. Further, Gaborone will have to be aligned with other international diamond centers, such as, Antwerp, London and Tel Aviv by attracting the first five star hotels in the country, international insurance companies, security companies, top class restaurants and courier services into Gaborone. All said and done the relocation will create a total of about 5000 jobs.

However, the move will call on the government to improve the standard of roads within the city, expand Sir Seretse Khama International Airport and improve the service of Air Botswana.

RELATED STORIES

Read this week's paper