De Beers, Botswana Government to partner new Venture

De Beers chairperson Nicky Oppenheimer and the Botswana government will launch a new joint venture company, the Botswana Diamond Trading Company, on May 23, 2006. A number of new mining releases will also to be signed. The day will mark 50 years of De Beers exploration in Botswana, which has resulted in four mines, one the largest, one the most valuable in the world, and two smaller ones. Botswana is now the worlds largest diamond producer, providing De Beers Diamond Trading Company with 31-million carats of mostly gem diamonds each year. Its sales, exclusively through the DTC, equate to roughly 35% of the worlds diamonds.

The Botswana DTC (BDTC) is the result of lengthy negotiations spurred by Botswanas desire to get more out of its diamond industry through marketing and cutting and polishing as mining production levels off. The new agency will supply an initial four cutting factories which De Beers has encouraged its sightholders to set up in Botswana. The BDTC will make up boxes for De Beers sights in London and there has been speculation that it will itself hold international sights, although this has yet to be announced.

Diamonds have fuelled Botswanas development, but the capital intensive industry employs less than 1.5% of the workforce. Botswana has an enviable balance sheet, credit ratings better than many European countries, but rising and persistent unemployment. The cutting and polishing is seen as one way of generating jobs. The rise of the industry has made Botswana overwhelmingly dependent on diamond revenues � in 2004/05 to the extent of a direct 35% of gross domestic product, 72 % of export earnings and 50% of government revenues. Indirectly the contribution is much more.