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Botswana’s Beaming Diamond Story
In the year 2013, history was created in the diamond industry when De Beers moved its aggregation and sorting activities to the Botswana capital of Gaborone. The Botswana government stressed that the transfer be carried out as part of the sales agreement signed by the sides in 2011.
By: Diamond World News Service
Apr 22 2014 4:16PM
Reference: 9053  

Almost as soon as De Beers and the Botswana government announced a 10-year diamond mining and sales agreement in late 2011, the countdown began. That was because one of the main elements of the agreement was that most of the operations of the Diamond Trading Company (DTC) be transplanted to the capital, Gaborone, by the end of 2013 after decades of aggregating and sorting diamonds in London.

In return, De Beers was given a 10-year agreement, instead of the five-year deals, which had always been the case in prior agreements. Despite the huge challenges, by the end of last year, Botswana held its first Sight. Given the enormous problems associated with the move, it seemed unlikely to some industry members and observers in late 2011 that the transplantation of the diamond operations could be carried out in such a brief period. Beyond the issue of moving DTC operations to Botswana and making the experience a smooth and agreeable one for Sightholders, some industry observers asked whether Botswana could have a long-term future as a diamond polishing center and diamond jewellery making hub given that its diamond mines are due to be depleted in a decade or so.

Practical Considerations
Some asked how Botswana would have trained and skilled sorters in place. Meanwhile, there were issues of practical concern for many Sightholders, including visa requirements, and long travel times since there are no direct flights, meaning they have to fly via Johannesburg, and then catch a 40-minute flight to Gaborone.

Meanwhile, Gaborone could obviously not provide the kind of benefits that London has, including tourism, hotels, restaurants, shopping and cafes. Many people wondered if Botswana's hotels and restaurants would be good enough.

There were also fears regarding roads and infrastructure, water quality, power supply, and Internet service, security and other Sightholder facilities such as food for religious Jews and Jain.

However, Botswana managed to hold the first Sight ahead of schedule last November and Sightholders found the facilities to be just fine. In addition, Sightholders have found that Sight week has been chosen by Okavango Diamond Company as the week when it offers its diamonds for sale and Petra Diamonds and Trans Hex have also coordinated their diamond tenders to fall at the same time. This has allowed diamond companies to kill a number of birds with one stone during their visits to Gaborone.

There are teething issues still to be resolved, admit De Beers Resident Director in Botswana, Reo Moroka, and Paul Rowley, De Beers' Executive vice president of global Sightholder sales.

The country has targets, including the possibility of direct flights. But the Botswana government is fully committed to ensuring that Sightholders and other diamond industry members have a soft landing.

Botswana Making Progress
Kago Mmopi, DTC Botswana's Communication and Corporate Affairs Manager, says the company has made exceptional progress in the six years it has been operating. The firm supplies stones to De Beers Global Sightholder Sales and to Okavango Diamond Company and to local polishers – the 21 DTC Botswana Sightholders.

The company has 430 employees who are citizens of Botswana and 60 per cent of them are sorters and valuers. "There were many doubters as to whether this could work. Would the airport be of a high enough standard? What about the hotels, restaurants, and transportation? But I believe we have seen a seamless transition. It has far exceeded expectations," he commented.

Neo Moroka, De Beers’ Resident Director in Gaborone and Chairman of De Beers Global Sightholder Sales, echoed those comments. He said that Sightholders were "pleasantly surprised" by the smooth transition of Sights to Botswana. "Sightholders said everything was better than expected: that includes airport customs, modern and secure facilities, hotels and restaurants, Internet and much else."

Mmopi added, "We have defied the skeptics. We have shown that we have the ability to be world class. The relevant ministry is hoping to sign agreements with airlines for direct flights. Let us remember that Botswana can provide visitors with tourism facilities that you won't see in London. It is important that people see the larger picture."

As for Moroka, whose main job is ensuring that De Beers and the Botswana government see eye-to-eye, he says he is the first stop in dealing with hiccups. He was a member of a steering committee with government representatives on the transfer of DTC operations to Gaborone. He says the government has proved its commitment to turning Botswana into a global diamond center. Furthermore, Botswana has more justification for becoming such a center based on its huge diamond production, certainly, he says, more than Antwerp and India, which "do not even have any diamond mines". Moroka estimates that the process of beneficiation would take time to further develop, and that further downstream activities such as jewellery manufacturing were definitely viable.

The Challenge for Botswana
Mmopi puts the scale of the challenge that the country faced into perspective. De Beers Global Sightholder Sales recruited locally, with more than half being Botswana nationals. "The local polishers had to be trained because they did not come from polishing factories where they already knew the industry inside out. So they had to be trained from scratch. But they learned really quickly, and the operations are running really smoothly. There are 21 polishing factories with 3,500 employees in total. They are producing goods that are similar to what is being produced in the rest of the world.”

He further added, "Beneficiation in Botswana is developing very well and we believe the government will realise its dream of becoming a global diamond center. The Indian firm Shrenuj has already established a diamond jewellery manufacturing facility here and it is working well. We are creating a critical mass. In 10-15 years, we may be the biggest diamond jewellery centers in the world. Even when diamonds run out in 2025-2030, we will be a service center for the rest of the world as a cutting center.”

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