Africa-Press – Botswana. Enhancement of the local beneficiation of diamonds is key to boosting Botswana’s economic growth and development, President Advocate Duma Boko has said.
Addressing a press conference in Gaborone yesterday, following the signing of a new rough diamonds sales agreement between the government and De Beers Group, President Adv. Boko said the new agreement encompassed a transformational package of commitments aimed at supporting the country’s economic development objectives and advancement of the diamond industry.
Among the commitments, he said was the creation of the Diamonds for Development Fund, which would be key in supporting the country’s economic growth, diversification and job creation, in line with the National Vision 2036 and National Development Plan.
“Diamonds are the cornerstone of our economy and the packages of initiative to be undertaken by De Beers are designed to enhance local beneficiation of diamonds and increase participation of the people of Botswana in the diamond industry. Therefore, the conclusion of this new agreement is also critical to the global diamond industry,” he said.
Additionally, President Boko expressed delight that the De Beers Group had also committed to an upfront investment of P1 billion and further annual contributions from its dividends from Debswana, based on its performance.
Other initiatives to be undertaken by De Beers, he said, included; investment in a diamond jewellery manufacturing facility, establishment of De Beers institute of diamond grading laboratory and starting up a diamond vocational training in collaboration with industry partners.
The marketing investments will be for category and other marketing programmes, agreed annually, aimed at stimulating rough diamond sales, protecting the ethical integrity of diamonds as well as maintaining and building consumer confidence in the product.
De Beers and the government have committed to co-invest over the life of the sales agreement and in proportion to both parties’ relative shares of Debswana supply. The co-investment by the government of Botswana and De Beers in marketing initiatives, President Boko said, would also help boost the diamond demand.
Explaining what the new sales agreement entailed, president Boko said the 10-year deal might be extended by a further five years and a 25-year extension of the mining licences, from 2029 through to 2054 for the 50:50 Debswana mining joint venture.
The 25-year extension of the Debswana mining licences, from August 2029 to July 2054, he said, would enable the joint venture to deliver long-term value from its existing mining assets and mine life extension projects beyond the current mining licence period.
The mine life extension projects, the President said, included; Jwaneng Cut.9, Jwaneng Underground and Orapa Cut.3.
“Under the renewed sales agreement, the government of Botswana’s rough diamond sales company, Okavango Diamond Company (ODC), will sell 30 per cent and De Beers will sell 70 per cent of Debswana’s production for the first five years,” he explained.
“For the subsequent five years, ODC will sell 40 per cent and De Beers will sell 60 per cent of Debswana’s production and both parties will sell a 50 per cent share for the five-year extension period. As part of this arrangement, De Beers and ODC have also both committed to supply diamonds for beneficiation in Botswana, in line with their share of Debswana supply,” he added.
For her part, Minister of Minerals and Energy, Ms Bogolo Kenewendo explained that government was working on the guidelines with De Beers to ensure that the Diamonds for Development Fund was adequately managed.
The Fund, Ms Kenewendo said, would be privately managed ‘and we are constituting the board and ensuring that there are proper government structures around the fund’.
“As we have pointed out, there has been some lapses in some funds previously, but it was because some of those oversight structures were not properly constituted.We are working to ensure that the oversight and governing structures are in place,” she added.
Government’s main objective, she said, was to ensure that Batswana interacted with their diamonds and that the industry was not foreign to them. The sectors that would be dealt with, through the fund, she said, were those that would bring about economic diversification, adding that some imperatives would be guided by the Ministry of Finance.
Commenting on some of the ODC’s struggles, the minister said her ministry was to rectify some of the inefficiencies related to the company’s business model of auctioning, ‘now that the market is aware of the ODC’.
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