09 Nov 2016

The Vice President, Mr Mokgweetsi Masisi, has encouraged diamond manufacturers and retailers to continually search for new methods that can help improve their performance in response to the prevailing and emerging diamond sector challenges.

Delivering a keynote address at the 2016 Botswana diamond conference, on Tuesday (November 8), Mr Masisi said “the focus should also be on leveraging platforms for stakeholder engagements, delivering sustainable shared value, along value chain, and using lessons learnt from partnerships for improvement.”

He said it was also remarkable that there was diverse representation in the conference from across the world, comprising representatives of the diamond supply and principal markets.

This, he said created a better background of wondering on the change in landscape of consumer demand, which was lately inactively impacted by price mismatch between rough and polished diamonds.

“Prices of rough diamonds have been higher, while that of polished diamonds were going down. As a result, the profit margins of cutting and polishing have been seriously eroded,” he added.

Challenges experienced in emerging diamonds, he said were not unique to Botswana, as some of the problems cited included; limited access to credit facilities as historic financiers in the diamond industry had pulled out, high production costs, unavailability of requisite skills and disruptive technologies, such as those used in production of synthetics.

Therefore, the conference theme, “Beyond Tomorrow”, Mr Masisi said “challenges us as a country that has been mining diamonds for over four decades to be more vigilant, innovative and visionary. It also provokes the diamond sector to strategically manage market information and to create a response to consumer demand.”

Going into the future, he assured players in the diamond sector that their investment in the diamond sector, particularly in Botswana, were and would be save, adding that “our track record speaks for itself. I give you that assurance.”

Furthermore, the Vice President said the positive impact of the diamond sector in Botswana had increased employment from below 500 persons to well over 3 700 in 2014 and advancement in technology.

With regards to stakeholder participation and partnerships, he said this was yet another platform for deliberating on effective partnerships that could maximise value along the diamond value chain.

Botswana’s beneficiation story, Mr Masisi said was also an incredible achievement. In 2008, he said government of Botswana, with support from De Beers Group of Companies, embarked on an impressive strategy of local value addition and beneficiation of diamonds.

This strategy, he said had enabled growth in a number of cutting and polishing companies, which grew to 20 both in secondary trading of rough diamonds from one entity to more than five.

In his remarks, acting Minister of Minerals, Green Technology and Energy Security, Mr Nonofo Molefhi, said there were many challenges and opportunities in the diamond industry, but it redeemed itself, a few years ago, when it developed a Kimberly Process Certification System (KPCS).

This system, Mr Molefhi said gave industry and the public opportunity to determine that which would be value for money.

“The introduction of the KPCS gave confidence to you customers and clients that indeed their procurement and purchases are value for money and therefore the system got rid of opportunistic blood diamond trading, which in my view was credible and therefore a milestone in the diamond industry,” he added.

The industry, the minister said got rid of blood diamond business from four per cent to just below one per cent ‘a remarkable achievement indeed, self-made- a process which allows industry to trade where others have failed.’

What is important, Mr Molefhi said was that mining should contribute to sustainable economy, which he said was more about preservation of the environment ‘not just the physical environment, but the social environment where you do your business, where your mines are located.’

“As you trade and as you mine, it is important that you minimise the ecological footprint of your mines by reducing negative impacts.

To me, that is where the future is and therefore it is important that as you undertake these activities you also support technology,” he added.

As part of its broader mandate and also to ensure the industry becomes a success it seeks to be, Mr Molefhi said government of Botswana, through Ministry of Minerals, Green Technology and Energy Security, would also provided the right environment to facilitate its operations, prosperity, licenses and mining.

In his welcome remarks, De Beers Group of Companies CEO, Mr Bruce Cleaver said this year’s conference was meant to look more closer at the diamond sector itself and to consider how together we might overcome the challenges faced by the industry, such as issues of; the future of financing, industry efficiency and rapidly changing consumer trends.

However, as challenging as each of these maybe, Mr Cleaver said “they also represent opportunities for us to improve the way we work and to become even stronger in the future.”

While industry financing has been the area of difficulty, he said the outcome of this had been greater financial transparency and greater robustness.

“And this is improving the competitiveness of the diamond sector. And whilst the diamond sector has been less efficient in some others in the past, we are now starting to see this catalysed improvement to industry management practices, value chain relationships and cost returns,” he added. ENDS