There is ample evidence to suggest that while diamond mining was always Botswana’s mainstay, as a country, we never really had a clear master plan of the path we wanted the industry to take.
We found ourselves having to rely on De Beers, the Oppenheimer family, their expertise and their technology to deliver the goods.
Because we had lacked a tactical plan of just how we were going to use our resource, the result has been that when the money from the resource started to flow, it found us totally unprepared to use it wisely for the long term benefit of the country.
That has come at a tremendous price.
In fact, the price we will pay is set to rise as the resource gets depleted.
As we speak today, the money is no longer there yet all information from the miners indicates that the resource will – as many of us always feared – be depleted in just over two decades if the exceedingly generous forecasts made by some are anything to go by.
In the not too distant future, diamond revenues will plummet, not just because of the unfavourable world economy but, more importantly, because it will become more expensive to mine them, owing to increased depths and inherent costs that come with going underground.
We have been caught napping.
The leverage that we used to have but never used will never come back again.
For many years now, we have been talking about moving DTC operations to Botswana.
During the last agreement, De Beers deliberately stalled the process, along the way undermining whatever little chance Botswana had of salvaging last minute benefits from our diminishing resource.
We now learn that as per the recently sealed agreement, DTC will finally relocate from London to Gaborone.
That will not happen immediately. It could take up to three years before we see the process moving ÔÇô if at all. By which time it would be too little, too late.
In the meantime the world is moving on.
Botswana’s stock in the eyes of the Oppenheimers has started to dwindle.
On Friday, the family announced they were selling their stake in De Beers (45 percent) to Anglo American, that other conglomerate, which is also a creation of the Oppenheimer founding patriarch, Ernest.
Ever a family of shrewd businessmen who hail from a long dynasty of successful businessmen, the current patriarch, Nicky Oppenheimer, knows so well that Botswana’s best days are behind us.
More than all of us, Nicky Oppenheimer knows that Botswana is no longer a place from where money will be made in the long term, least of all from diamond mining, his family’s specialty.
He has made his billions, and is now disinvesting, taking away with him the billions as he turns his back against a country from where only recently he had to receive a cash bailout to rescue his asset-rich but cash-strapped empire.
But then who in their right mind can blame Nicky Oppenheimer?
He was always in it for money. And he has made tonnes of it!
Now that there is no more money to be made (or to put it the other way, now that he has made his money) it’s time to move on. And he is moving out.
A few years ago when it became clear to them that Botswana’s days as a leading diamond producer were numbered, De Beers shifted their attention elsewhere to Canada and Australia.
Their exploration budget in Botswana, if there is still any was cut to the bone.
Procurement budget, for Debswana which they always treated as their cash cow was moved to Johannesburg.
And when recession struck, they called on Botswana Government not only to rescue them but to also finance a multi-billion pula expansion project at Jwaneng which, by the way, remains the hallmark of what will in due course become a carcass of the legacy of Botswana’s mismanaged diamond industry.
In contrast to the Oppenheimer family, what the government and people of Botswana decimally failed to do was to use Debswana as a cash cow.
Perhaps more crucially, we also failed to attach the political importance of Debswana to the very upkeep of the country. Of course, we made the money, but had no long term plan in place to manage the resource.
Which is why our Government failed to protect a citizen Managing Director when he was sacked by a technically illiterate board that was working at the behest of De Beers.
Because we did not have a master plan of how to manage Debswana and the resource that the company produced, we have failed to use the money derived from therein to kick start other industries that would in future drive the economy when diamonds would no longer be around as they certainly will not be in just over a decade.
Is there any chance that we will find another Orapa so that we could continue to have the fuel that our economy needs to go on?
Experts say the chances are next to zero. In fact, many serious prospecting companies have already left our shores.
Botswana’s long term prospects without revenue from diamonds are very scary.
One only has to go back two years ago when Debswana took a decision to close its operations because there was nobody in the market willing to buy our diamonds to see what a ghost country we are going to become post the diamond boom.
It is not an exaggeration to say a failure on our part to extract maximum deals for ourselves when we still had an opportunity and leverage to do so will, in the near future, catch up with us.
But then what does the Anglo/De Beers deal mean for Botswana?
The short answer is that the deal portends the end of Botswana’s influence over their diamonds.
With the new deal, Botswana’s prospects are as grim as they are grave.
As much as we were always overawed by the De Beers power and influence, Anglo American is much bigger, much more powerful and many times the size of De Beers.
If as a country we failed to reign in family, what chance is there that we could control Anglo!
If we failed to control the Oppenheimers, what chance is there that we could even start to dream of controlling Anglo American ÔÇô an empire that is among the top hundred companies in the London Stock Exchange, not to mention one of the top three of the world’s leading mining resource companies!
What is likely to happen once Anglo has taken over De Beers?
First and foremost is that Debswana head office in Gaborone is likely to be closed, ostensibly to cut costs but also because there is a feeling that Botswana has badly mismanaged Debswana.
The company will as a result be run from Johannesburg. London is also not too far off the mark.
With the head office moved to 44 Main Street in Johannesburg, procurement budget will be administered from there.
And Batswana would then have to kiss a good bye to all prospects of using Debswana as a tool for citizen economic empowerment.
Thus before we applaud the deal, we must as a country debate what is in it for us!