Tuesday, April 20, 2021

Diamond sales migration from London to Gaborone to create business opportunities

The relocation of the De Beers Sales operations from London to Gaborone by end of 2013 should bring business opportunities, Diamond Hub’ Mmetla Masire said.
In preparation for the relocation, the Botswana government and De Beers have signed a Sales Agreement, which is a 10 year contract for sorting, valuing, marketing and selling of Debswana diamond production in September 2011.
The agreement entitles Botswana, through Okavango Diamond Company, to purchase diamonds from DCTB, and independently sell 10 percent to a maximum of 15 percent of Debswana’s production over 4 years.
The move supports Botswana cutting and polishing industry; increases the allocation of diamonds to the diamond manufacturing businesses the previous $550 million (P4.7 billion) per year to $800 million (P6.7 billion) per year.
More so, the aggregation of diamonds from De Beers’ operations in Botswana, Canada, Namibia and South Africa commenced in Gaborone in July 2012.
The business opportunities range from diamond beneficiation involving upstream cutting and polishing, dealing, tool making, training, financing, security, transport and consultancy services. The cutting and polishing licences are open to companies with independent sources of rough diamonds, 5 additional companies licensed to date bringing the total 26.
“Diamond securities frequency of movements will increase in proportion to the sightholders shipping. Although there are security risks, their increase would lead to more security companies offering efficient risk services, protecting diamond premises, participating in diamond transactions. As money supply chain augments, security companies should hold the potential to counter money laundering and other blue collar crimes,” Masire said.
He said due to the myriad of business transactions, communications should provide high speed Internet including Voice and Data service. Internet and Communication (ICT) issues are being addressed adding that Fibre optics upgrade around DTCB area is ongoing. However, ICT Services remain a risk and need to be given more priority if they are to meet the high demand.
“We are more likely to see more air travel such as charter flights and new commercial planes linking Botswana to other popular diamond centres. Because a majority of the agreements with international airline operators have been unsuccessful, securing direct flights to Gaborone remain a challenge at this stage. Completion of up grading of the Sir Seretse Khama International Airport VIP Lounge is on schedule. While new entrants like transit buses, executive taxis, chauffer driven limousines and higher end car rentals will add a new look to the local transport scenario,” he said.
DTCB sightholders have increased from 16 to 21. As more sightholders visit Gaborone, tourism opportunities should increase with proper packaging, such as a focus around Gaborone, facilitated Diamond Industry Tourism excursions to mines and polishing centres or one day specials to tourism areas such as Kasane.
Developments in the diamond industry hold real estate, hospitality and immigration potential. The increased demand for land, office space and new business ventures supporting migration especially for international sightholders form part of the growth chain and so will be accommodation for migrating employees and those from housing services.
Furthermore, demand for higher quality services is likely to increase as diamond merchants are relatively wealthier as compared to a greater part of the population. There is also going to be opportunities for higher end hotels and resorts. Masire challenged the hospitality/tourism industry to come to the party and offer services that will keep sightholders coming back.
Masire said with regards to commercial banking, US$3 to 6 billion (P25 billion to P54 billion) will be transacted in Botswana yearly, requiring the participation of a fully capitalized the banking sector.
In anticipation for the exciting developments, the commercial banking sector has to remove the red tape associated with clearing of transactions in particular foreign, as diamond purchases are only delivered upon receipt of payments. Delays could render the marginal business uneconomic and Botswana un-attractive to diamond investment
As investment opportunities are not just sitting and waiting, enthusiasts are free to take advantage of the relocation and the Diamond Industry in Botswana.
Since the Government has a number of incentives and support in some sectors, it becomes prudent to maximize returns as a market leader as opposed to be followers. Current sales agreement offers huge potential to transform Botswana’s economy and role in the global diamond industry.
The private sector would have to drive the opportunities to derive maximum benefits. Government continuous to provides an enabling environment. The climate is ideal for investment so that people maximise the benefit of the Sorting Centre moving to Gaborone.

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