Saturday, October 24, 2020

Gaolathe to lead Botswana team to Belgium diamond conference

Finance and Development Planning Minister, Baledzi Gaolathe, will next week lead a Botswana delegation to the Belgian city of Antwerp to announce the country’s readiness to host the diamond sorting, cutting and marketing centre starting from early next year, sources said.

“Botswana’s finance minister and Kago Moshashane (deputy permanent secretary in the ministry of minerals) will be speaking at the conference,” leading diamond experts have said.

Gaolathe’s attendance comes after President Festus Mogae’s spokesperson had indicated that he would not be able to attend due to other commitments at home. This year’s diamond conference is largely seen as a big event for Botswana as it signals the fall of London as the centre of cutting, sorting and marketing of diamonds since 1610, despite the fact that they have never had a diamond mine.
Writing in the latest edition of his book “From Mine to Mistress”, one of the world’s leading diamond experts, Chaim Even-Zohar, who was in a team that advised the Botswana government together with an Israeli consultancy company LEK which led to the devolution of power from London to Gaborone, said: “More than ever, the Botswana government realizes that it has no choice – it must engage in a kind of “Manhattan” project to diversify its economy. It has to create a manufacturing sector (and culture), and it must use its diamond resources to reap the benefits from vertical downstream integration.

“It needs to look into jewellery manufacturing and may need to explore “diamond tourism” possibilities. It has no other raw material that can lend themselves for beneficiation. It can neither wait nor postpone such effortsÔÇöthe future of the nation depends on them,” Even-Zohar said in his best selling book on diamonds.

The devolution of powers from London to Gaborone will see the establishment of a full fledge DTC Botswana office here by the beginning of next year which, according to the agreed selling policy between the Botswana government and De Beers market rough diamonds to the value of US $ 370 million in 2008 and upped to US $ 500 million by 2009. According to sources, some of the terms contained in the agreement signed last year during the renegotiation of Jwaneng Mine from 2011 DTC Botswana will be able to sell as much diamonds as it wants.

The creation of DTC Botswana has seen the establishment of 16 diamond cutting and polishing companies and at the same time Botswana will not endure the 10 percent commission currently being payed to DTC London for marketing its diamonds. However, the commission that will be charged will be reduced to five percent, but the government will have to meet De Beers half way in marketing diamonds to the 16 sight holders already accredited to Botswana.

The 1000 page document, which forms the basis of the new changes, contains a ten paged document that is called “deal brakers” that was spearheaded by Kago Moshashane and delivered to De Beers by Slaughter & May, the Botswana government’s lawyers in London, who called for the breaking of the centuries old tradition of London being the centre of diamond trading.

It is understood that it contains some commitment penalties if the transition is not followed to the latter.

“One of the first signals of a decision by Botswana to pursue its interest rather than that of De Beers group as a whole came in 2004, when the government refused De Beers’ suggestion that it (or Debswana) take an equity position in De Beers’ 100 percent owned subsidiary, the DTC ( now referred as DTC International). Botswana did not consider the best interest of DTC to be either complementary to, or consistent with, the best interests of Botswana. On the contraryÔÇöBotswana found the DTC International a wasteful marketing system ( costing some US $ 200 million a year to operate) and raised questions as to whether Supply of Choice mechanism was serving the best interest of the country,” Even-Zohar said in his book.

Following a landmark agreement between De Beers and the Botswana government over the devolution and subsequent transfer of duties from London to Gaborone, the two parties who have been in a marriage for nearly 40 year have put up a US $ 400 million DTC Botswana building.

The move transfer activities from London to Gaborne is expected to create close to 5000 jobs ÔÇô directly and indirectlyÔÇöbut, as of a fortnight ago, the government was wary about the conduct of some snicks within the trade union labour movement of derailing the campaign.

Meanwhile, the Antwerp Diamond Conference comes three months before the Israeli Rough Diamond Conference, which will be held in Tel Aviv. The conference will also be attended by African diamond producer countries.

RELATED STORIES

Read this week's paper

Paul kicked out of Zebras camp

Under 20 boys national team coach, Keitumetse Pio Paul has been relieved of his duties as assistant coach.  He...