Wednesday, July 6, 2022

De Beers plans to open a Diamond Information Centre in Botswana

The Group Managing Director of De Beers, Gareth Penny, has said his company is planning to open a Diamond Information Centre in Botswana.

Speaking to Sunday Standard, Penny said the center will showcase to the world the whole diamond pipeline, right from exploration downstream.

The Centre, which will open next year, is the closest De Beers has come to answering calls for the establishment of a centre for diamond studies.

Some commentators have argued that, given the importance of diamonds to Botswana, government should consider opening a centre at the University of Botswana, wholly dedicated to teaching about the diamond industry.

In a way the Centre will aim to close the existing knowledge gap about the diamond industry among Batswana.

Although Botswana is the world’s leading diamond producer – by value – it has been found that a great majority of Batswana know little or nothing about the diamond industry.
Penny said although there is still a long way to go, there are early signs that the diamond industry is experiencing recovery.

Drawing comparisons of the 1930s Great Depression, Penny said 2009 was by far the worst year De Beers has had to go through in the last 70 years.

Though not yet out of the woods, he predicted that the financials expected in two to three months time will prove that company is well on course to a strong rebound.

“We have been through a lot of challenges. But the sales have doubled from last year. The mood in the cutting centers is positive.”

He said China is leading the recovery process with her strong demand.
Demand in the United States, which is the traditional lead consumer, remains somewhat subdued as is Japan.

“America is up a bit, but remains a long, long way to normality,” said Penny.
The good thing, he said, is that emerging markets, notably India, and Latin America were all showing positive growths.

Answering a question on whether or not De Beers will be re-listing, Penny said, as management, they have not wasted a minute of their time thinking about the matter.

“Talk of listing is quite flattering. It is an acknowledgement of the great value that this company has. But quite honestly it is not something we are focused on. The Government of Botswana has put up share of equity capital and our focus is to show that the decision was a good one,” he said.
With recovery on the way, Penny said the business model that De Beers intends to follow would be underpinned by restoring the Group as a leading player in every part of industry ÔÇô from exploration downwards.

He said all signs are that De Beers will retain its position as the world’s diamond company ÔÇô especially because third party debt, which has recently been frequently cited as the company’s Achilles Heel was now significantly down.

With recovery on the way, Penny, who is also the Chairman of Debswana, said his efforts are wholly focused on strengthening governance structures.

“Going forward, we will be fully focused on governance. We will be transparent in everything that we do,” he said.

With particular reference to Debswana he said governance procedures will have to be strengthened.
He, however, ruled out De Beers taking over Debswana under any form of management contract.
But is De Beers happy with Debswana’s efficiencies?

“Of course there is room for improvement at Debswana,” he answered.
Talking about the relationship of the shareholders, specifically the representatives at board level, Penny downplayed recurring accusations that Botswana Government representatives were the weaker link.

“In every relationship every partner brings their strengths. What De Beers brings is great technology and the knowledge of the industry. Neither side should apologise for what it is good at,” he said.


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