Thursday, September 29, 2022

Going into the nitty gritties of beneficiation

Perhaps the question that remains to be answered regarding beneficiation in Botswana is what happens after local workers have acquired knowledge and skills on diamond processing activities.

The activities include cutting and polishing, jewellery manufacturing, rough and polished trading and diamond support services. What could also come as a follow-up question is what will happen when diamonds can no longer be mined from Botswana; will it still be feasible to operate a diamond factory plant as it is been done in Antwerp, Tel Aviv and New York where as reported by Professor Roman Grynberg, a former research associate at the Botswana Institute for Development Policy Analysis (BIDPA), diamond processing remains profitable.

The subject of beneficiation from the side of Botswana depicts a tapestry which might be easily defended by the fact that diamond processing is still at infancy stage. Despite that a few of the factory plants have been operating in Botswana for close to 20 years, diamond processing remains at the early stage of development. The closure of factory plants at the turn of economic turmoil between 2013 and 2015 also abated the development of the processing activities.

When asked what beneficiation means to them, De Beers sightholders (clients) intrinsically vocalised employment of local citizens as the substantial benefit which they have derived from them setting up a diamond manufacturing base in Botswana.

The sightholders proved the employment significance by citing on the basis of comparison the number of Batswana employed to that of foreigners. The ratio of citizens to foreigners as was quoted demonstrated a higher make up of citizens to expatriates. The sightholders in that respect expounded that such employment has allowed the transfer of knowledge and skills on the intricate processes of cutting and polishing a diamond, a unique skill set which the employed citizens are said to possess.

Dov Tannenbaum, Partner at Leo Schachter, affirmed the diamond company’s commitment to Botswana through its manufacturing plant that it established 18 years ago located outside Gaborone.

“We were not looking for a quick buck; we invested tremendous amounts in human resource. Having a plant in the same country where diamonds are sourced is a natural and very important part of our pipeline,” he declared.

He enthused that the company took pride in that their products of which a lot of it is based on special cuts were made in Botswana, adding that they were continuously trying to improve the quality of their products. The plant has, however, borne the brunt of the market indigestion, which as was observed relegated manufacturing activities, something which Tannenbaum attested to.

“We have in the past employed over 300 people, we unfortunately don’t employ that number today,” he said. The plant currently employs 80 people.

Paras Mehta, Director of Sales at Eurostar India professed to be the only company that has a ratio of 95 percent citizen employees to 5 percent expatriates. The plant, he said, currently employs 150 people, a number which has plunged from about 500 in the past. Mehta explained that 90 percent of processes is mostly by machines whereas the remaining 10 percent is where human interface is needed, which he described as an “art of manufacturing converted into a science”.

With its other manufacturing plants in Asia, Mehta made an observation that though people in Botswana demonstrate a desire to learn their efficiency levels aren’t in par with those in Asia.

“We decided that we wanted to come to Botswana, build a factory that would stand alone,” said Benny Yerushalmi, Chief Executive Officer (CEO) of Yerushalmi Bros. His remark was to emphasise the mindset that the company adopted in setting up a plant in Botswana, which was to have it to be on the same level as with other plants they have elsewhere.

“People thought it was impossible to set up in Botswana, that if you’re manufacturing in Botswana the cost is so high that you’re losing money. We came with a different mindset. We lost a nice amount in the beginning until we established,” he said.

The plant currently employs 250 workers of which 16 of them are expatriates, citing that the factory relies heavily on the local skill. Yerushalmi attributed the transfer of skills to local workers as the reason the factory is efficient, explaining that this has produced a win-win situation for both the workers and the company. He asserted that the Botswana factory is the company’s flagship plant. “If today, God forbid, I’m not getting diamond in Botswana, I’ll keep the factory,” he declared.

KGK Managing Director Sandeep Kothari expressed that the advantages of beneficiation are multifold to which he gave examples such as value addition, creating enterprises for the people in the country where the diamonds are sourced, creating skills and empowering people with knowledge as to how the entire manufacturing process works.

Kothari stressed that though sharing knowledge and skills is necessary what is most important is to take beneficiation to a different level of making sure that a new set of business people emerges from the countries where the diamonds are sourced. “Beneficiation is creating a new set of businessman for the coming generations, that’s how important it is,” he said.

When asked if the relocation of diamond sales operations from London to Gaborone in 2013 affected the manner in which the company operates, Manish Pethani of M.Suresh Company responded that there was no change, as it was a simple change in place. The company opened a factory in Gaborone last year after it acquired a license to cut and polish, he said, and has about four months since it became fully operative with a current local workforce of 100.

Rafi Yerushalmi, Managing Director at Dalumi Diamonds views beneficiation as a give and take relationship in the form of a win-win for both the workers and the company. Yerushalmi shared that establishing a factory in Botswana took time to build and currently has a workforce of 250 workers of which 17 are expatriates. Through the established factory, Yerushalmi said that Botswana has become a second home to the extent that the company is now thinking of other investments to make in the country.

Employment and transfer of skills as elucidated by the sightholders appears to be central in the benefits offered by beneficiation. The impact does not go further to demonstrate how the possession of such skills by local workers assists them to participate in commercial activities around diamond processing. If beneficiation does not produce the next generation of business people involved in diamond processing in the country, then its efforts could prove to be in vain.


Read this week's paper