Stories running in the South African media that DTC London has cut secret deals with several diamond cutting licence holders in Botswana, sidelining DTC Botswana appear to have been misinformed.
The Friday edition of South Africa?s Business Day quoted ?sources familiar with the situation,? saying?De Beers? London-based Diamond Trading Company (DTC) has approached several diamond-cutting licence holders in Botswana to sign separate supply arrangements with the company?s selling arm, as opposed to all such supplies being handled in consultation with the government.
DTC is preparing to relocate the majority of its sorting and preparation of rough for sale from London to Gaborone in 2008 ? a move forced upon De Beers to achieve the renewal of its mining licences for the Jwaneng and Orapa diamond mines.
De Beers on Friday explained that the DTC London deal to supply Botswana cutters was approved by the Botswana government and De Beers and will not last beyond 2007.
This was echoed by Deputy Permanent Secretary in the Ministry of Minerals Energy and Water Affairs, Kago Moshashane, who said he would be shocked if the sales deal went beyond 2007.
In a written response, De Beers Botswana told The Sunday Standard that the ?DTC UK had agreed with the two shareholders being, De Beers and the Botswana government to supply those clients that have been granted licences by the government of Botswana and who have requested supply as part of their 2007 business plans for their factories in Botswana.?
De Beers explained that this is necessary to avoid delaying those companies that are ready to begin cutting and polishing to do so before Diamond Trading Company Botswana becomes operational in 2008.
Presently, out of the 16 factories, there are 5 that are currently ready and operating in Botswana ?At that point, it is intended that the Diamond Trading Company Botswana would have its own criteria and systems to supply these clients. This is one of the reasons that the shareholders have this week appointed the Managing Director, Brian MacDonald, in advance of 2008. It is essential that the company has supply policies and procedures to enable it to own these contractual relationships with its own clients. There are no other arrangements being considered by De Beers in respect of the 16 licences.?
Business Day, however, quoted an anonymous source saying the new contracts between DTC London and Botswana cutters were made behind the government?s back.