Botswana is aiming to get its envisaged diamond exchange running “as soon as possible”, as another move planned to widen the benefits that could be derived from the diamond industry.
Big players in the government enclave and the newly established Diamond Hub have pointed out that they are working around the clock.
“We want to start as soon as possible but we need to understand that we want to establish something big,” Director for Mineral Affairs, Nchidzi Mmolawa, said giving an example with the diamond exchange at the heart of Antwerp.
The exchange, whose details are still being worked out, is likely tailored along the same lines with Antwerp exchange in Belgium and the Israeli exchange that is Ramat Gan – just outside Tel Aviv.
Although final details are still to be worked-out, trade volumes are expected to start at around US $500 million per annum but the tricky thing is that Botswana has to avail her produce to the market.
“You cannot go around telling people that you are going to start trade while you do not avail your produce to them. As such, we still have to go through a process of negotiation with our partners (De Beers),” Mmolawa said.
De Beers and Botswana government’s current sales agreement expires at the end of next year and it is expected that government will come up with a suggestion where a certain percentage of Debswana production will go to the open market. Since the diamond mining started in Botswana some 40 years ago, the two partners have relied on the De Beers’ controlled Diamond Trading Company.
DTC heavily relies on the De Beers’ price book.
“We would like to develop diamond trading in Botswana. What we have now is DTCB, which is all about buyers and polishers who do that for export. There is nothing much in terms of traffic volume,” Mmolawa said.
For the exchange to attract the world’s attention, Sir Seretse Khama International Airport needs to have at least three gates, have some reputable airlines and build a five star hotel in Gaborone.
Head of the Diamond Hub, Akolang Tombale, who is in charge of the country’s most ambitious programme, said the plan will allow diamond sellers and buyers to trade on regular basis.
However, he pointed out that there is a need to tighten the existing laws to ensure that rogue traders are kept at bay.
“If we do not get it right, this would tarnish our image as a country,” he said, adding that “this should last beyond diamond mining in the country.”
“This is a big undertaking and we cannot afford to go wrong,” Mmolawa added.
The Diamond Exchange will bolster the efforts of the relocation of the DTC from London to Botswana which is expected to yield in the marketing, sorting and valuation of diamonds in Botswana.
Further, it is planned to yield the aggregation of all De Beers production in Botswana, possibly starting from the end of next year. The relocation of the DTC to Botswana has seen the establishment of 16 sightholding companies in Botswana and the number of traders is expected to rise with the coming in of the exchange.
DTC Botswana has also resulted in the establishment of the diamond bank, diamond insurance companies, security companies and gemological institute in Botswana since its opening.