| Botswana could give De Beers tough competition |
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| Written by AUBREY LUTE | |||
| Wednesday, 17 March 2010 00:00 | |||
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• Tombale wants Botswana to sell diamonds directly, will De Beers agree? • Debate is on as Sales Agreement negotiations continue
Botswana could benefit much more from its diamonds if it also traded in rough diamonds and engaged more in other downstream activities such as manufacturing specialised jewelry and financing. “We must be involved more, that is my stand,” said Dr. Tombale, former Coordinator of the Botswana Diamond Hub and former Permanent Secretary in the Ministry of Minerals Water and Energy. Tombale said Botswana has benefited as much as it can from producing rough diamonds and selling them through De Beers. “In every US Dollar we get 80%, while they get 20%”. Now Botswana should find niches within the downstream aspects of the diamond industry to add more value to its economy. “When you start trading in the rough you will have the flow of diamonds from all over the world. This could be beneficial in the long run when we no longer produce diamonds, because we will continue trading even when we are not producing,” he said. He cited countries such as India and Belgium which trade in diamonds although not producing. Botswana should take advantage of its position as a top producer and use its muscle to secure a tight grip on the diamond business, Tombale said. The former permanent secretary said it is very difficult for Botswana’s economy to diversify and ignore the mineral sector; the country’s diversification plan should focus on diversifying within the mineral sector. Currently Botswana sells her diamonds through the Diamond Trading Company (DTC) under a Sales Agreement that is negotiated every five years. In 2004 Botswana negotiated for the DTC to be situated in Botswana - and succeeded. But Tombale believes that Botswana should negotiate to have part of the diamonds it produces going straight to government to be marketed separately from the De Beers setup. However observers say it is unlikely that De Beers would agree to Botswana keeping back some of the diamonds because the arrangement would severely eat into its bottom-line. They say this explains De Beers’ recent sharp reaction to reports that India and China were interested in buying diamonds directly from Botswana. Then De Beers CEO Sheila Khama retorted sharply that the arrangement between Botswana and De Beers was binding and long term. But observers say the fact that the Sales Agreement is negotiated every five years leaves room for other players to try their luck in convincing Botswana to sell directly. Tombale says selling part of Debswana mines’ production directly would give De Beers healthy competition. “If we sold independently we would give De Beers price discovery,” he said. This would also do away with perceptions that De Beers is cheating Botswana because, “it will be an open system.” At the moment De Beers operates a closed system although the price of diamonds is market related. “A lot of people do not understand this, so it would do De Beers a lot of good to allow Botswana to sell independently,” he said. Selling directly would also open a window of opportunity for locals to be trained in other aspects of the diamond business - such as marketing - than polishing and cutting, “which in actual fact are the most difficult.” Tombale left the diamond Hub last year under unclear circumstances although his contract was due to expire this year. Several people linked with the diamond industry speculate that his premature departure was due to his forthright approach and tough stance towards De Beers when negotiating on behalf of Botswana. Others suggest that his views differed radically from those of persons in high authority. However Tombale declined to discuss the circumstances surrounding his departure, merely saying that preferred to say that he had long retired from the public service. De Beers recently appointed Neo Moroka, a former Cabinet Minister and former Minister of Trade and Industry- and reputedly a close associate of President Ian Khama - who lost an election in 2009, as its CEO in Botswana. Stephen Lussier, De Beers Executive Director and Board Chairman of De beers Botswana, told The Gazette in an earlier interview that, “our business is entirely about partnerships and we always take a long term view to these arrangements.” He said they strive to meet the long term aspirations of their partners and on the other side making sure that they generate wealth for themselves. “But we also make sure that our partner also wins,” he said.
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Na tota Ke Sala Ke ipotse Gore re le Batswana re tsile go thanya leng????? ke ipotse gore le ha gotwe ga rena madi re ka palelwa ke go ikagela madilrelo a rona mo ga rona a bo re processor teemane ya rona go ithella a felela re rekisa di finished products , ra togelwa ke go tsietswa ke bo De beers
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As a Motswana trader based in Asia, i think this would be a good move. De-beers needs competition for sure! its only naturally that down the line we wake up and realize that,we're not fully exploiting the current set up. Of course De-beers knows this, thats why they're against the move. It would be interesting to find out the real reason,its not like the US selling Arms to Taiwan and threating China's security
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That will be a great move!We need such people like Dr Tombale to show us that every thing is possible!High time for us to think outside the box! Lets leave our traditional beliefs that we possess. We know very well De Beers will try all moves to scare every 'Lay-thinking' Motswana! I strongly say "YES", we should look for possible solutions to diversify our mining sector! We have shared our resources with De Beers for long and i think its enough!
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I will be a great move i agree more so that lately we have found out how De Beers has been swindling us billions of pulas since the discovery thereof! It will even been be better if we could server relationship with De Beers completely. We will at least now get our diamonds' worth. If at all our government still wants to maintain some form of relations with De Beers it should be in their own terms.
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It will be a great move. we have to do away with the closed system, since we are regarded as a developing country and donors are starting to pull out because they say we can sustain ourselves looking at the resources that we have.
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I totally agree with Mr Tombale's stance. If Botswana and especially Batswana are going to have any long term direct benefit from our countries richest mineral, Diamonds. Even after Debswana and the government have exhausted all of our diamond deposits. We have to become hands on players and learn to master this world wide industry.
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| Last Updated on Tuesday, 16 March 2010 09:33 |
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