Friday, October 30, 2020

Magang warns government to be cautious with De Beers

Former Minister of Minerals, David Ntsimele Magang has warned government to be cautious in their dealings with De Beers mining company of South Africa.

In particular, the retired politician said government has to be alert and steadfast in ensuring that the diamond aggregation and beneficiation operations are relocated to Botswana as promised by De Beers.

He said if government is not careful, De Beers could either renege on the agreement to move their Diamond Trading Company from London to Gaborone or resort to delaying tactics.

As part of conditions set before renewing the Orapa and Jwaneng Mines leases, government insisted that De Beers should relocate DTC to Gaborone.

De Beers has agreed to the condition, but recently there have been delays of the move, prompting skeptics to prod government to push for a timetable. Most cutting and polishing companies which have been licenced to operate in Botswana are dragging their feet. Curiously, they are all De Beers sight holders.

“Unless our government is careful any aggregation that comes to Botswana could be very small,” said Magang in an interview with The Sunday Standard.

Drawing from his past official experience and personal contacts with De Beers during his long political career, Magang said the strategy employed by the SA diamond giant has always been to “deny Batswana knowledge” of the diamond industry.

“We benefit from diamonds. But has anyone ever stopped to ask themselves if we could have benefited more? It should strike us as odd that we are the world leading producer yet few if any Motswana really knows about diamonds,” added Magang.

He said no effort has been made to transfer knowledge from De Beers to Batswana.

Magang said it is very important that diamond cutters and polishers applying to set up in Botswana should be licensed by Botswana government.

Even more important he said it should be the government of Botswana calling the shorts in who these and other sight holders are.

“We should only bring in diamond cutters who abide by our regulations. Those regulations should be of Botswana government and not De Beers.”

He said it is very important for Botswana and their government to bear in mind that De Beers did not volunteer to relocate to Botswana.

He said they did so grudgingly when they were cornered by government negotiators before the Orapa and Jwaneng Mines leases could be renewed.

“The only solace is that, unlike in the past, now there is a growing number of Batswana who can see through the spin by De Beers,” said Magang.

He added that the relocation of the downstream diamond industries to Botswana can only work if it is properly and closely managed by government.

Putting into context how it is that a growing number of diamond cutting companies are applying to set up shop in Botswana when for decades calls for the same were dismissed as unviable, Magang said both the Botswana government and De Beers are under pressure.

“Were it not of the fact that Namibia and South Africa started it, we would still be stuck in their time honoured argument that diamond polishing in Botswana is not viable. Now our leaders are under political pressure and De Beers is under pressure from Lev Leviev, an Israeli tycoon and De Beers nemesis, who has opened cutting and polishing industries across Africa and Russia.

Leviev has also been putting pressure on Botswana to sell him diamonds directly and not through De Beers, promising large scale employment creation in return.

It was then that De Beers relented and agreed to relocate to Botswana chiefly to put Leviev at bay, but also to ensure that government renewed mining leases in their favour.

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