Southern African diamond producing countries pledged support for Botswana as the next host of the international diamond aggregation (mix) as De Beers is about to move its operations from London for the first time since records on a formalized trade in gemstones began.
According to the plan overseen by Brian MacDonald ÔÇô the pioneering DTC Botswana chief executiveÔÇöand Tim Dabson, who is DTC London’s beneficiation director, Botswana will start sorting and marketing its diamonds from next year.
“Namibia supports aggregation that will be done in Botswana,” Namibia’s diamond commissioner, Kennedy Hamutenya, said in Antwerp last week.
Botswana, Namibia and South Africa will each have their own diamond trading company but Botswana will ultimately have an upper-hand in the selling and marketing as part of the bigger plan aimed at mineral resources beneficiation.
This will be a break with the past which saw London becoming the diamond selling and marketing centre for over 300 years. It started being the focal point during the time when India was the dominant producer- some 150 years before the gemstones were discovered in Africa.
Namibia, which currently produces some two million carats per annum, has been given the green-light to sell and market 16 percent of its produce or the equivalent of US $ 300 million by 2009.
“Sixteen percent of Namibia production will remain in Namibia and the other supply will come from aggregation since DTC London is moving its operations to Botswana,” he added.
The Botswana operation, which will handle diamonds to the value of US $ 500 million by 2009, is expected to take production from other De Beers mines across the world by 2011- making it the biggest diamond trading hub. It will mix diamonds from various mines and sell them to De Beers’ sightholders from across the world.
South Africa’s Minerals and Energy minister, Buyelwa Sonjica, who led a delegation to the Antwerp Diamond Conference told investors at her country’s road-show exhibition that they had amended the Diamond Act in a bid to encourage foreign direct investment in South Africa.
Part of the new moves including the setting of the office of the State Diamond Trader who will purchase diamonds from producers and sell it to the manufacturers.
“Investors will have consistent supply of rough and the state diamond trader will have the powers even to buy outside the country including aggregated diamonds from Botswana,” she added.
The South African delegation, which included government officials and black entrepreneurs, had separate meetings with their strategic partners who are interested in investing in South Africa. It currently has a strategic agreement with the World Diamond Centre to assist in luring potential investors to their country. Antwerp, which is one of the biggest centers in the world, has about 2000 diamond manufacturers.
South Africa’s campaign will involve setting Johannesburg as trade zones to enable an effective marketing of jewelry, while Kimberley and Durban will be the cutting and manufacturing centers. The move is expected to give it a grip in an industry that is worth about US $ 70 billion per annum.
“What Africa, particularly South Africa, needs are investors to see through the beneficiation process,” Sonjica said. “It’s time for South Africa to reap the benefits of the diamond sectors.”