The Botswana Government has been refusing its entitlement in rough diamonds due to it under the recently signed marketing contract with De Beers, it has been revealed.
Under the agreement, Debswana’s production – which, at 22.9 million carats in 2011 accounted for just over two-thirds of De Beers total output – will be sorted and valued by DTC Botswana.
Subsequently, in 2012, 11 percent will be sent to a newly formed government entity – recently named Okavango Diamond Trading Company – which will conduct the proposed government tenders, while the rest will be sent to DTC for aggregation and then distribution to sightholders.
Paul Rowley , acting chief executive officer (CEO) of DTC Botswana told Rapport recently that DTC Botswana still needs to determine how the government’s entitlement will be handed over since the supply cannot reflect DTC boxes or selling assortments due to laws regarding competition. Once the government has established its trading organization, we will form a workshop and working group to determine how to hand over the goods at DTC Botswana, he said.
The government’s share of Debswana’s production, 10 percent of which was available retroactively from January 2011, will increase by 1 percent per year until it stabilizes at 15 percent anticipated in 2016. The goods will be supplied in a 10 sight cycle, to mirror the one used by the DTC. Rowley explained that if the government refuses to take its entitlement, as it has until now, DTC gains the first right of refusal to those goods.
The refusals are not expected to continue once the government launches its tenders. The whole point is to incentivize more of the diamond industry to come to Botswana and the government rough tenders will certainly do that. And so will the DTC’s massive shift of continents.
While DTC’s move from London to Gaborone will initially only create approximately 40 local jobs at the company, most of them part time, it is hoped that the auxiliary services associated with the development will spur job creation. Tourism and retail will be the obvious beneficiaries.