Sunday, October 25, 2020

Gaolatlhe wants Gov’t/De Beers diamonds sales negotiations postponed until after elections

BY KABELO SEITSHIRO

It will be in the interest of both the Botswana Government and De-Beers Group of Companies not to enter into any agreement relating to the diamonds sales, atleast this year.

This is according to Ndaba Gaolatlhe – Member of Parliament (MP) for Gaborone Bonnington South who is also leader of the Alliance for Progressives (AP).

Gaolathe said since 2019 is an election year thus likely to be marred by political uncertainties, the negotiations are best kept in abeyance or postponed until 2020.

“This wait is also necessary to clear any air that the diamond sector itself may be contaminated by a cloud of suspicion given the lack of transparency,” said Gaolatlhe.

Gaolatlhe also observed that the negotiations are alarmingly opaque and secretive, adding that the executive branch of government exploits lapses in the governance system to do as it wishes.  He said that there are allegations, for example that Botswana is heavily dependent on foreign advisors with close ties with De-Beers in that they are former De-Beers executives. He said these individuals are conflicted and he added that competent citizens with outstanding credentials are being left out of the process.

“Any agreement should give birth to a significant proportion of the diamond output and should be beneficiated in Botswana and also greater share of the Debswana output should be marketed directly by Botswana through Okavango Diamond,” he stated.

Ministry of Minerals, Energy Resources and Green Technology is expected to lead the Botswana team to negotiate a new sales agreement with government’s long-time partner, De Beers’ Group of Companies.

In late 2018 the government, while admitting that the talks are due, has said that nothing official and concrete is on the table yet.

Cornelius Dekop – Permanent Secretary (PS) in the Ministry of Minerals Resources told a special committee of Parliament in November 2018 that some aspects of the discussions are yet to be finalized on the government side.

Dekop was however quick to mention that the Botswana government will negotiate in good faith for the benefit of the country.

While the diamond sales agreement is to be done with De Beers, Dekop said that the government will still have to explore all options as the matter is the back bone of the Botswana’s economy. It has previously been reported that the Botswana government is also considering engaging in talks with Russians should the De Beers agreement hit a snag.   

In the meantime, Dekop said that discussion between Botswana and De Beers remains confidential adding that he is also restricted from sharing the information by the stock exchange listing rules as some De Beers subsidiaries prohibit the sharing of market sensitive information. De Beers’s mother company ÔÇô Anglo American is listed in a number of stock exchanges across the globe.  Anglo American owns 85 percent of De Beers and the remaining is held by Botswana’s government while Debswana Mining is a 50-50 joint venture between the Botswana government and De Beers.

In May 2018, hardly a month after taking office ÔÇô the President Mokgweetsi Masisi hinted on the position of the government after he said it will push for the industry to create more jobs and is “dead determined” that more diamonds be cut and polished in Botswana.

“We have had a wonderful relationship with De Beers and we expect that relationship to be even more cemented,” Masisi told Bloomberg in May 2018. “There is a way of actually achieving a win-win for both, and that’s what we desire.”

Presently, De Beers sells diamonds at invitation-only sights held 10 times a year at its offices in Botswana. The company sets the prices and its handpicked customers, known as Sightholders, are not able to negotiate.

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