Botswana Plans A Diamond Future Beyond De Beers

Botswana and De Beers have been entrenched together for a while and in many ways its been a good deal for Botswana. The country has been able to use the profits from diamond mining to develop much-needed infrastructure. But the global diamond slump has been hard on the nation. Speaking at the World Federation of Diamond Bourses (WFDB) meeting in Antwerp in November, Dr. Akolang Tombale spoke about the need for Botswana to use diamonds to stretch beyond diamonds. Currently the country mainly exports rough stones but Tombale believes that Botswana needs to be more involved in the diamond industry, in cutting, polishing and trading stones. Diamonds.net has a great piece on Tombale’s speech and why it is so key that Botswana get the most value from its natural mineral resources. As diamonds move along the supply chain from mine to jewelry store they collect value. Selling out at the rough stage cuts off the potential to earn more.

De Beers set up its main sorting facility in Gaborone in March 2008 and established the Diamond Trading Company Botswana (DTCB). So far 15 factories are up and running, with the last one is due to launch soon. Under the guide of DTCB sightholder Safdico, the Diamond Technology Park was launched in January 2009 creating a new potential hub for Botswana’s diamond cutting industry meaning that more diamond value will stay in the country as it switches from exporting mainly rough stones to exporting both rough and cut stones. Tombale told Rapaport News that the next step is to set up a diamond trading platform in Botswana for third-party trading. Currently Botswana and De Beers are in a symbiotic relationship, they have joint venture agreements as equal owners of the mining company Debswana and of DTCB. The Botswana government has a 15 percent stake in De Beers. The potential of a trading platform means that Botswana wouldn’t need to rely on De Beers to sell all its stones. Tombale says that going forward some but not all of Debswana’s production would be sold through De Beers? DTCB. Tombale would like a new diamond trading platform in place by the end of 2010 allowing others to trade in the country with the independent marketing of Botswana diamonds taking place a year later.

This move seems to be part of the global trend away from the stranglehold that De Beers had on the diamond market decades ago. De Beers once had absolute sway over the diamond industry, setting prices and completely controlling supply and demand. Now the market is opening at a rapid rate. For Botswana, moving away from the De Beers relationship is the next phase in its development, a way of declaring that it is part of the future diamond industry, not part of its past.

As seen in the photo above, the relationship between Botswana and its diamonds is complicated. The photo shows a protest in front of De Beers by Survival International meant to draw attention that the Bushmen of the Kalahari were pushed out of ancestral lands when diamonds were found there. While overall the stones have been good for the country’s economy and citizens there are those who have suffered and had their way of life forever altered.

This entry was posted in Diamond Talk. Bookmark the permalink.

Leave a Reply

  • jv
  • stop
  • visa
  • w3
Shopping Cart0