Botswana is currently doing an audit to make sure that illicit diamonds do not enter the country when its independent diamond market starts operations.

Permanent Secretary in the Ministry of Minerals, Energy and Water Resources, Gabaake Gabaake said at the first Diamond Town Hall Meeting that government will create a clearing house to block illicit diamonds entering the country from independent producers and manufacturers. He said the process of selecting independent producers is going on and the response has been good. "We are busy selecting key partners but because we want to start small, we will initially choose a small core group."

Government has set-up an ambitious plan to make Gaborone become one of the leading diamond hubs in the world. The dream will be realised through the Diamond Hub. The proposed independent diamond market will run parallel to the current De Beers-DTC Botswana platform, which exclusively markets diamonds from Debswana mines.

Representatives of government and De Beers said on Tuesday that they are committed to the realisation of the independent market. Both quashed reports that De Beers is not happy about the arrangement, which is seen as a threat to its existence in a country that produces 25 percent of world's rough diamonds.

"There is no difference of opinion between us and De Beers," Gabaake said. He stated that government is not planning to trade diamonds from Debswana but will encourage other producers locally and abroad to relocate their activities to Gaborone by offering incentives like relaxed taxation.

"Our dream is to evolve from a leading producer by turning Gaborone into a world diamond centre because we believe this can act as a catalyst for economic diversification," he said. Gabaake added that government is re-looking at its fiscal regime to create favourable tax incentives for the diamond industry. "We hope to have finalised that by early next year," he stated.

There will be high-level security for the huge flow of diamonds to be traded in the country in the independent market and Gabaake said construction of a secure transfer facility at the Sir Seretse Khama Airport is near completion.

The independent marketing channel is part of a strategy decided in 2002 to make the country shift from being a producer to a world diamond centre by facilitating the development of downstream industries commonly known as beneficiation. Government has realised that the country's main mines, which has been producing for over 30 years might be exhausted, hence revenue may reduce drastically. This created the need to look for other alternatives like a diamond centre and a viable and sustainable market that will survive beyond the lifespan of Jwaneng and Orapa mines.

De Beers has already made major concessions over the past two years during which it established the Diamond Trading Company (DTC) Botswana and agreed to the aggregation of its entire international diamond production to relocate to Gaborone.

The diamond hub will have a rough and polished trading centre; cutting and polishing centre; jewellery manufacturing and retail; and ancillary business.

Through a facility complete with a trading floor that operates like a stock exchange, Botswana will trade diamonds from other countries. However, during the Town Hall Meeting, it seems government was not sure whether to sell the diamonds through tenders (Sights) or auction.