Sunday, September 27, 2020

Diamond beneficiation debate in the early years

I feel that I should talk about some of my concern with regard to processing and benefication of our mineral resources. As you are aware, since I became your Minister I have discussed with you and others on many occasions concerning the processing of minerals, whether it is Copper, Diamonds, or Soda Ash etc. As a country, and typical African developing country, we are mere producers and exporters of primary commodities and very little processing takes place in this country. The processing is done elsewhere. As a country we are unprepared and to a certain extent unconcerned about processing our primary natural resources. Like most developing countries, we are satisfied with selling and exporting our raw materials to the developed countries for processing and thereby creating employment in those countries. In the meantime, a country such as ours is starved of jobs and skills in the secondary industries. In my view and provided the skills are available or made available, we should have comparative economic advantage in the processing of the resources that we produce, such as diamond, soda ash and hides and skins etc.

As a Ministry, we must accept blame in not playing the role of leader by failing to advise other Ministries of Government such as Education, Commerce and Industry etc about the potential for downstream processing of our mineral resources so that the training can take place. I feel for instance that as a ministry we to blame for appearing to insist on exporting virtually all the raw materials instead of encouraging and promoting the processing of some of these minerals, as well as adding value and creating employment, skills etc. It is ironic that after over two decades, we still do not have a Motswana who is capable of promoting, marketing or dealing in diamonds. All these important aspects of the industry are left under the management and control of our partners.

This reminds me that some years back in a court proceeding, a remark was made that because no Motswana was licensed to process or deal in diamonds, any Motswana found with a rough diamond must be committing an offence. We therefore have by our conduct and based on the provision of our legislation made it impossible for Batswana to know anything about diamonds. We have never tried to encourage any Motswana to apply for a license because this is a product which is wholly under the control of government under the law. Our partners of course prefer it that way that is as far as possible very few Batswana should know something about diamonds. I feel this is unhealthy.

I feel that on the basis of the above points, I strongly feel that we should:-

a) Train Batswana in marketing and promotion of diamonds. An undertaking was made by my predecessor some seven or six years ago to the effect that Batswana would now be trained. So far very little has been achieved. I am aware that something is being considered at present and although this is belated, my feeling is that we should actually identify talented young people who are capa ble who are capable of learning or have had some experience at BDVC to immediately be sent abroad to various centres for attachment.

b) I feel that some of the trainees can be seconded to CSO as well as other centres. I was informed by Jack Lunzer and Maurice Templesman separately that an offer was made some years back to Botswana Government to attach some of the people we wished to train to their organisation for training purposes. Apparently these offers never taken up but I am told they are still open to us. My feeling too is that other diamond producers such as the Australians and or the Russians can also be approached to take on some of our trainees. Such an exposure will be most valuable to the trainees and the country.

c) I am not satisfied with the technical expertise in the ministry for the purposes of advice. The technical advice on diamonds and other minerals is lacking because we do not have people who are concentrating in these areas. I do not have people who are concentrating in these areas. I do not know what the mineral division does or nor have I ever received any proposal as to the way forward in terms of the optimum utilisation of our mineral resources for the benefit of this country. To this extent I feel that a properly constituted specialist unit in the ministry should be established. Thinking aloud, it may consist of a Mining Engineer/Geologist, Economist, a Lawyer and a Financial Analyst.

We will discuss the duties of this unit. I suggest this because I am not always happy that every bit of advice that we get about minerals, especially diamonds is from our partners and not from within the Ministry. Even when we attend these regular annual meetings here in Botswana or outside Botswana, we merely attend to be told what had been decided by our partners. Our contributions to these meetings are merely to accept, reject or ask questions. It is my feeling that too much is at stake and therefore we should inform ourselves and become real partners in this business. We can only do this if we can develop skills amongst our people.

Diamond Cutting/Polishing

I feel I must mention something about diamond cutting because after more than two decades we should have established some significant diamond cutting industry in this country. However I am well aware of the fact that our partners have always resisted the establishment of polishing industry on some flimsy reasons that cutting is unviable o that diamond producer countries ought to concentrate on production rather than on processing of diamonds. Unfortunately as government we seem to buy nonsensical arguments lock, stock and barrel. We have been reluctant to push for diamond processing in this country for many years. Yet we are aware that while the mining industry, particularly diamonds, contributes large percentage of our revenue we nevertheless know that mining contribute very little with regards to employment. The major employment can therefore come from processing, that is, polished as well as jewellery making in the country.

Unfortunately, we have not undertaken to process diamonds in this country because our partners are reluctant. As I said before, diamonds in particular, are strategic minerals and this country is what it is because of diamonds. Let?s face it, without diamond this country will be still poorer. Unfortunately as a country and nation we are too ignorant about the products upon which we depend. We are afraid to know and understand more about diamonds. We have left it to our partners who find us easy going because we do not want to know. They have therefore found it convenient to keep us from that knowledge and information about diamonds in our own country. I do not blame them because they are in business.

We are to blame because we trust too much. We have been convinced and we have convinced ourselves that diamond cutting in Botswana is not viable. It is only viable in other cutting centres like Israel, India, Thailand etc. To reinforce this argument the three diamond cutting companies or plants in Botswana are starved of adequate supply of material so that they run at a loose. I am sure you will agree with me that this is not right. The various visits that the officials made to cutting centres in the last two years in the main indicate that polishing of diamonds can be viable anywhere and the skills can be developed anywhere because even the traditional cutting centres are now transferring to centres where the labour cost appear to be lower.

In the circumstances, I feel that we should go all out to encourage, as a deliberate government Policy, diamond cutting industry in this country. We should actually invited companies that are capable of setting up here to do so if they have the capacity to do that. I know that our partners resist this and have the capacity to frustrate companies that establish in this country, as they do with regards to the existing plants. However I feel that the provisions of the Act should be applied where there is some resistance by the supplier.

In any case, a careful reading of the side letter signed by the Botswana government and our partners in 1978 Agreement, under article 6 and 7, clearly indicates that the supplier, that is CSO, is required to supply diamonds to cutting companies in Botswana at London prices. It will appear that the supply of diamonds do not have to come from London. CSO can supply diamonds in Botswana at the London prices, to the cutting companies.

Let us meet and discuss.


Read this week's paper

Sunday Standard September 27 – 3 October

Digital copy of Sunday Standard issue of September 27 - 3 October, 2020.