For years, tourists visiting Robben Island saw nothing wrong with the numbers on the prison cells. The concrete walls, steel bars and the history that came with them were intriguing enough. However, when the famous prison was turned into a tourist attraction several years ago, there was a mistake in the numbering of prison cell 29.
For an ex-Robben Island inmate with an extraordinary interest in his legacy, the mistake must have seemed inexcusable. Three weeks ago Michael Dingake insisted that it should be corrected.
“You see, I spent more time in that cell than any Robben Island inmate and I strongly feel the mistake should be corrected.”
Robben Island administrators may have corrected the numbers on prison cell 29, but Dingake’s legacy is still under threat. The Botswana Congress Party (BCP) founding president and his successor Otlaadisa Koosaletse are being accused of selling out to De Beers in the diamond beneficiation campaign. The controversy has its roots in what seemed like an official trip of parliamentarians to diamond cutting and polishing plants in India, Thailand, Antwerp and London. Their detractors believe that after the all expenses paid trip, sponsored by Debswana the duo abandoned the campaign. A look beneath the surface, however, reveals a more complex story.
“You know, we must correct this misconception that we have been bought by De Beers” says Dingake. We are sitting on red folding chairs over a breakfast of Greek Salad, toasted sandwiches and fries. Koosaletse is turned up in a yellow “Ellesse” golf T-shirt and chinos. Dingake is decked out in a powder blue safariesque top and a denim cap embroidered “Robben Island” on the forehead. We begin to piece together a picture of power struggle, deception and scheming. It is a story with implausible characters and plot twists. There is a desperate minister leading a campaign that refuses to fly, millionaire diamantaires waiting for an opportunity to dip their hands on the Botswana diamond riches, a government held hostage by a big diamond multinational and a switched on Gaborone lawyer who wants to save the country from the stranglehold of De Beers.
At the heart of it all is a scheming corporate big short. As it turns out, Koosaletse and Dingake were merely pawns in the big power struggle.
In one corner was David Magang the then Minister of Mineral Resources. Magang recalls that when he was appointed to the post, he thought “Right! Now I am finally going to prove everyone wrong”. By everyone, he is referring to the diamond mining giant, De Beers, the government of Botswana and the local media who believed that diamond beneficiation would not work in Botswana.
What happened next suggest that the adventurer did not fully grasp how messy things could turn out. By his account, De Beers had choreographed the whole thing to create an impression that beneficiation would not work in Botswana. He remembers Mabrodium, the Belgian company which was the first diamond beneficiation company to set up in Botswana. They had a cutting factory in Gaborone that employed between 60 and 70 Batswana. They had to buy unseen parcels of stones at non-negotiable prices, forced to take or leave the stones granted by the De Beers marketing arm. The stones were mostly coated diamonds from the Democratic Republic of Congo, then Zaire. The company never made profit. As it turned out, Mabrodium was only a broker for another De Beers sight holder which was making the profit.
With pressure from Magang, De Beers grudgingly agreed that Teemane cutting plant be set up in Serowe. They convinced government that the cutting factory should be run by Debswana. This gave De Beers a free reign over Teemae, and like Mabrodium it turned in huge losses. Then there was Lazare Kaplan which complained that their cutting factory in Molepolole was making losses because the diamond mix it bought from De Beers did not make for a viable enterprise.
Lazare Kaplan lobbied members of Parliament, among them Koosaletse and Dingake. They wanted to buy diamonds directly from the mines in Orapa and Letlhakane.
“After our trip from the Lazare Kaplan plant in Molepolole, we made a lot of noise about beneficiation”, but government would not barge, remembers Koosaletse and Dingake. Lazare Kaplan continued buying unseen parcels of stones at non negotiable prices, forced to take it or leave it by the De Beers marketing arm. Finally the cutting business collapsed under its accumulated losses.
With all local cutting factories in Botswana turning losses, Magang’s lone voice in government was drowned by the “cutting is not viable in Botswana” chorus. De Beers was vindicated and Magang was caricatured as a mad minister who was arguing above his head. Magang however simply joined the dots, and a sinister pattern emerged: De Beers was cooking the numbers to back its claim that cutting was not viable in Botswana.
It is then that Magang turned to the opposition BNF to broaden his support base.
He sent out an invitation to the Botswana National Front to nominate two representatives for a government sponsored tour of cutting factories in India, Thailand, London and Antwerp. The invitation was however hijacked by Debswana, a 50-50 partnership between government and De Beers.
Koosaletse and Dingake remember such an invitation being discussed at a BNF central committee meeting. They do not remember who sent the invitation. They however remember going to the Debswana head office at the main mall to collect their air tickets.
A lawyer friend who understood the goings on in the diamond industry warned them to be weary of De Beers. The lawyer, who insisted on anonymity, introduced the two MPs to an investor in the diamond industry whose application for a cutting factory was in Magang’s “pending” tray. The lawyer also gave them contacts of Lev Leviev and Israeli tycoon who had also applied for a cutting licence in Botswana.
Leviev once worked as one of those De Beers sight holders, buying unseen parcels of stones at non-negotiable prices. Being forced to take or leave the stones granted by the diamond cartel infuriated him. He was eager to strike back.
His breakthrough came in Russia. Leviev has cultivated close ties with Russian politicians, including Vladimir Putin long before he became president. Already well known as a cutter and polisher of diamonds in the 1980s, Leviev was asked to help the Soviet state-owned diamond firm set up local factories 15 years ago.
He agreed and formed a joint-venture with the state firm, now called Alrosa. But he insisted that stones for the factories be supplied directly from Russian mines, rather than diverted through De Beers’s central system. De Beers was furious at the loss of supply, but the factories got their local stones. When the factories were privatized, Leviev somehow emerged as the exclusive owner.
What happened in Russia set a pattern for clashes elsewhere. Leviev found that governments welcomed factories that create jobs and add value to the diamonds they export; it is a smart way to snipe at De Beers.
Angola was next. Angola’s diamonds are among the world’s best when measured by value per carat and promise a lucrative return for anyone who can market them. De Beers has had a long interest there. Leviev first invested $60m in the country in 1996, financing a mine at a time when civil war was raging. And just as he cultivated Russia’s governing elite, he struck up warm relations in Angola.
It was a well-timed move. The Angolan government despised De Beers. In the days when its monopoly was secure, De Beers regularly bought up any supply of rough diamonds that appeared on the market. It was accused of helping, indirectly, to fund UNITA, the rebel army in Angola, which sold huge quantities of diamonds.
With two of De Beer’s enemies on their shadow itinerary, the two MPs began a game of one upmanship with the diamond mining giant. When they got to London, they were joined by Debswana Managing Director Louis Nchindo and an executive from De Beers London.
The two MPs broke away from the itinerary scripted by Debswana and went behind the back of De Beers official to meet a diamond investor who had earlier made contact with them in Gaborone. Over dinner they compared notes and took advice from the investor who was itching to open a cutting factory in Gaborone.
They however never had an opportunity to meet Leviev. Their itinerary took them to India where they visited sweat shops. The saw diamond cutters packed like sardines inside small cutting factories with unhygienic conditions.
Koosaletse remembers that in Thailand they visited cutting factories where cutters were twiddling their fingers with nothing to do ÔÇô a result of the South East Asian then economic crisis. Nchindo told them that factories there were successful because Thais were hard working.
They also went to other factories owned by families. Nchindo explained that those were successful because they had institutional knowledge spanning hundreds of years because they were passed down from one generation to the next in the same family.
“We however never for one believed that beneficiation would not work in Botswana. In fact we even made an appointment to see Magang and explain to him that we believed beneficiation would work in Botswana. The minister however could not see us because he was rushing off to a meeting. We never got to see him because he was immediately transferred from the ministry.”
Meanwhile, Nchindo was using the India trip as grit for his anti-beneficiation campaign. He would tell journalists at press conferences that “I took Dingake and Koosaletse to see cutting factories in India, and they were appalled by what they saw there. In Botswana you would be arrested if you did that.”
Dingake and Koosaletse, though still championing beneficiation, did not respond to Nchindo’s statement. Unfortunately they never got an opportunity to present their case in parliament because the debate on beneficiation never came up in the house after their trip.
How the plot went awry and portrayed the two MPs as De Beers collaborators in the anti- beneficiation campaign may come to be judged as the end height of an era of scheming diamond corporate big shorts who thought they ruled Botswana.
“We never received a thebe from Debswana. They did not even give us pedeum during the trip. And none of our children ever got a scholarship from either Debswana or De Beers” says Koosaletse.
