Sunday, March 26, 2023

The story of diamond beneficiation defined

If Jacob Thamage, the coordinator of the Diamond Hub, had his own way, diamond beneficiation would sound like ABC, propelled by the recent sales agreement between the Botswana government and De Beers.

This week, the Diamond Conference, held in Gaborone under the theme: Botswana ÔÇô an emerging diamond centre: Beneficiation and Opportunities, gave Thamage a chance to spell out things simple and straight forward. But considering the diamond has been a commodity not directly connected to its people besides economic development, it still remains an illusion how beneficiation will permeate to the man in the street.

Under the new agreement beneficiation seems real but investment is needed to capture the benefits. Thamage himself contents that the current sales agreement offers a potential to transform Botswana’s economy and role in the diamond industry but there is need to “recalibrate”, work differently in order to harness the benefits. The government says it has an “unwavering” commitment to empower its citizens to capture the beneficiation process.

Historically, Debswana diamonds were sold exclusively by Diamond Trading Company International and the agreement was for the period of five years, and now it has been extended to 10 years. The current agreement running for 10 years is on condition that the sales functions migrate from London to Gaborone ostensibly in order to benefit the downstream Botswana economy.

The government has the right to purchase on the same terms as DTCI and sell 10-15 percent of Debswana production by value. The government says it is in the process of establishing a minerals marketing company and plans are at an advanced stage to start operations this financial year. The annual supply threshold to the cutting and polishing industry will have to increase from $550 million to $800 million.

DTCB says sightholders have increased from 16 to 21 in preparation for the relocation of the sales agreement. The agreement will see aggregation and sale of Debswana, Namibia, Canada, and South Africa diamonds culminating in over $6 billion worth of diamonds being transacted through the local banking system per annum.

Every five weeks, representatives of over 70 DTCI sightholders will be in Gaborone to buy diamonds.
Thamage says as more sightholders visit Gaborone tourism opportunities are likely to emerge, much as the demand for health services as the diamond industry population increases. In the education sector, the availability of quality education for expatriates’ children is crucial.

As volume and variety of activities increase the demand for office and housing will correspondingly increase as current office space will be constrained. Diamonds are a high risk commodity calling for specialised diamond and mineral transporting security companies. There will be frequency of diamond movements with different sightholders shipping their buy which creates opportunities for the security industry.

Communication also becomes critical especially internet connectivity as most representatives carry computers connected to their offices elsewhere. Air travel has always been a problem for Botswana calling for direct international flights as the country transforms into a diamond hub to avoid being in places where representatives of companies might be required to obtain visas such as South Africa, which is the current situation. Locally the taxes have to offer better value for money and comfort than they have been.

Thamage urges the government to speed up the processing of and turnaround time for visas, residence and work permits. He said his office has just recruited a senior person to focus on migration issues from the government side.

The greater question however remains that are we going to see new players in all these services or it will be business as usual for the older and well placed businesses harnessing the opportunities at the expense of the man in the street while there is such a hive of activity caused by diamonds coming to Botswana.

Much goes to employment, are the citizens going to hold meaningful positions as the diamond industry expands. Of the 3 297 employed in the cutting and polishing industry, how many citizens can be counted at decision-making positions?


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