The founding coordinator of the Botswana Diamond Hub, Akolang Tombale disclosed that Botswana used to get only $3 billion from the world diamond industry. Permanent secretary in the Ministry of Minerals, Energy and Water Affairs, Tombale admitted that because of Botswana’s inability to obtain Fair Trade practices with the diamond industry, they had to invest in had to go into down-streaming activities, adding that ‘It was high time as we are the leading diamond supplier in the world,”
“It was, in fact, less than one percent. That is why there was that feeling that we had to go into downstreaming activities of the diamond industry. It was high time as we are the leading diamond supplier in the world,” Tombale reflected.
Hardly enthusiastic about the financial implications of Fair Trade, “De Beers indeed wanted things to remain as they were in the beginning, arguing that it worked for both parties” insisted Tombale. Realizing that tough business requires tough negotiating, Botswana hired an international consultancy company that helped us renegotiate the conditions. It was difficult, but we had the support of our president Festus Mogae, as well as the then-minister for minerals, Boometswe Mokgothu, and the then-attorney general, Ian Kirby, and my deputy at the time, Kago Moshashane, and former permanent secretary in the ministry, Blackie Marole, now the managing director at Debswana. I was not alone. They had passion for a new dawn for Botswana,” Tombale enthused.
According to Tombale, the estimations showed that all things being equal, Botswana should now generate $500 million from downstream activities this year, compared to the $30 million it made in 2007, increase the cutting and polishing companies from 4 previously to 16 with an independent diamond trading facility in Botswana
The revolutionary changes that tilted the diamond scales in favor of Botswana were introduced in 2006, following the signing of a new lease agreement with De Beers. Tombale is the first to admit that the negotiations with De Beers were ‘long and difficult’, negotiations for the new leases culminating in the Botswana government’s share from Debswana mines rising to 80.9 percent.
The agreement included the fact that ‘De Beers should do the marketing of diamonds on its own’ after the former monopoly previously succeeded in insisting that Botswana’s contribute towards diamond advertising and promotions for the last 40 years.
Having formerly fought tooth and nail to penetrate the U.S. market, where it was not allowed to operate because it was seen as a cartel and having been accused of monopolizing the diamond trade, De Beers has since undergone the transformation from a public listed company to a private company but the question is, did it change anything?
Tired of being raped and pillaged, Botswana’s passionate representative Tombale commented, “we realized that we could use our current status as the number one world producer of diamonds to assert ourselves and become a world diamond center, even when we no longer have diamond mines in Botswana. Countries like Mauritius, Belgium, Israel, India, China, do not mine diamonds, but make more money from diamonds than us, for instance. We could use our diamond resources to attract diamonds from other parts of the world to come and sell here.”
Tombale, however, admits this arrangement of coming up with a parallel diamond trading company has not gone well with De Beers. “Naturally they opposed it; they wanted to remain the only diamond marketing and selling company in Botswana. they feared it would take diamonds from their mines, but this is our vision, our plan,” Tombale explained.
Although India and China recently showed interest in becoming direct clients of Botswana, her parallel diamond trading company, has not taken off although encouragingly, the founding diamond hub coordinator categorically stated that “the plan has gone to the highest office and has been approved. It is now a question of when, and not whether, it will happen or not.”
“The vision is to create diamond traffic so that people will be coming from all over the world to Botswana to buy diamonds. This step could have spin-offs on local tourism. It could also result in us having a direct flight overseas,” Tombale said.
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