Brian Benza
18 March 2008
All is set for the official opening of Diamond Trading Company Botswana (DTCB) this evening, a milestone occasion at which outgoing President Festus Mogae will be present.
Also present will be Vice President Ian Khama, De Beers group executives Gareth Penny and Nicky Openheimmer, senior government officials and diamond industry magnates. The occasion will also mark the handing over to the Botswana Government of the P400 million DTC Botswana building by De Beers.
During a media tour of the building yesterday, De Beers Botswana Managing Director Sheila Khama said 14 foreign journalists had also been invited to witness the momentous event which will have a crucial effect on Botswana's future course of economic development.
"We are very excited by this moment," Khama said, "and we wish to appeal to everyone to join us on this occasion which marks the beginning of diamond beneficiation for Botswana." DTCB, which takes over the operations of the Botswana Diamond Valuing Company (BDVC), is an equal partnership company with board seats shared equally between the Government of Botswana and De Beers.
It will process stones to the value in excess of 36 million carats per annum and sell them to 16 Sightholders licensed in Botswana.
The world's biggest diamond miner has acquired 39 state-of-the-art diamond-sorting machines at the cost of P69 million and installed them at DTC Botswana headquarters on Airport Road in Gaborone.
The company's Managing Director Brian MacDonald says the machines will be operated by skilled staff who will also use traditional hand sorting techniques to achieve exceptionally high levels of accuracy in colour, clarity and weight categories of diamonds.
The core business of DTCB will be the sorting, valuing, marketing and selling of all Debswana production, which constitutes 22 percent of the world's diamond output. It is projected that by the close of the decade, over US$550 million of rough diamonds will be sold annually for manufacturing in Botswana. While 90 BDVC employees have been made redundant by the transformation, 3000 jobs will be directly created. Many more will flow from auxiliary services like banking, security and transport.
Two international banks, ABN Amro and Anterwep Diamond Bank, have already expressed interest to set up shop in Botswana to finance Sightholders.
"The establishment of DTCB will be a catalyst in the country's vision for long-term growth and diversification of the economy by encouraging the development of new business in sectors such as banking, transportation, IT, security and tourism," said Khama.
"The scope is much broader than just DTCB, every stakeholder in this industry is expected to fully participate so that the true gains of diamond beneficiation (may) be realised."
The management and shareholders of DTCB last year agreed on a supply allocation contract for the next three years in which there will be an annual supply worth US$260 million, US$360 million and US$550 million released to Sightholders in 2007, 2008 and 2009 respectively.
But as Batswana punch the air in celebration tonight, their merriment will not be shared by some of the traditional cutters and polishers who have poured cold water on the beneficiation scheme, saying until its cost structure was radically changed, it was difficult to rationalise the programme economically.
In an industry already grappling with a huge supply deficit, the traditional cutters and polishers have been stung by the move, which entails further diversion of supply from them to Botswana.
Beginning 2009, De Beers also plans to aggregate production from all its mines around the world in Botswana where it will be put into parcels for sale to customers worldwide, making DTC Botswana the home for the aggregation of all mines owned by De Beers worldwide and from all mines in which the company has a joint venture arrangement.
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