Diamond-studded future for Botswana

(via National Jeweler Network) iAfrica writes:

Botswana, the world's largest diamond producer, is targeting a 17-fold increase in its fledgling cutting industry within five years.

It also aims to provide its diamond mines with all support services from local sources, President Festus Mogae said on Tuesday. He announced that the local cutters would be part supplied direct from a producer, as well as the De Beers' Diamond Trading Company, which until now has been the exclusive marketing channel for Botswana production.

Diamond centre
"We can and will graduate from a diamond producing country to a world class diamond centre," Mogae told delegates from the international industry at a dinner in Antwerp, Belgium.

"The cutting and polishing industry in Botswana has been very small, cutting diamonds worth about $30-million per annum. It is our wish the 16 companies now licensed to operate in Botswana should in five years' time be cutting and polishing at least half a billion dollars worth of diamonds per annum," he said.

Botswana was aiming to develop its diamond industry, not only to polish and cut stones across the market, but also to provide all other financial and technical support services. This would be helped by the migration to Botswana by 2008 of industry services carried out by the De Beers' Diamond Trading Company (DTC) in London, primarily the aggregation of rough production.

"This will attract related services to Botswana, such as diamond banking, security, insurance, security, technology and engineering as well as grading or diamond laboratories," Mogae said.

Better balance
He has previously stated that a major reason for development of cutting and polishing was to help alleviate Botswana's growing unemployment; but in Antwerp stressed this must not happen by the industry concentrating on lesser skilled operations to satisfy the larger volumes sold at the lower end of the market.

"We hope that there will be a balance between employment creation through the cutting of smaller goods and profitable operation which means cutting higher value goods. It is indeed our hope that all companies will do everything possible to ensure employment creation but we also recognise that they should be viable," he said.

The DTC's Botswana operation (DTCB) would become operational in 2008 and be a joint partnership between De Beers and the Botswana government, as is its present diamond producer Debswana.

"All diamond manufacturers in Botswana will become clients of DTCB," Mogae said. "It will supply them with mixtures rather than Debswana-only production, at DTC determined prices which we trust will be market related."

Allay fears
Whilst Debswana markets exclusively through the DTC, the local cutters would also be supplied direct by Diamonex, an Australian- and Botswana-listed company whose projects are entirely in Botswana. Its Martin's Drift property, due to commence production during 2007, comprises kimberlites previously discovered by De Beers.

"The diamonds from this producer will be made available to companies in Botswana outside of the DTC system, also at market prices. They will only be exported if the cutting and polishing companies in Botswana do not buy them," Mogae said.

This is not seen as the beginning of a move towards direct marketing of all Botswana production but rather as a possible way to allay fears that bringing rough diamonds onto the market in Botswana might open up a channel for the introduction of conflict diamonds.

De Beers and Botswana were architects of the Kimberley Process, which seeks to prevent trade in the small number of gems produced to fund conflict in Africa. Last year, De Beers Botswana chief executive, Sheila Khama, registered concern about opening the sealed and secure process to sell to local cutters.

"Nothing we do to develop the cutting and polishing industry will be allowed to interfere with the Kimberley Process," she said.

More info @ http://business.iafrica.com/news/590862.htm