19 Oct 2017

Government is getting value in the upstream part of the diamond value chain where Debswana operates, says the general manager of Orapa Letlhakane and Damtshaa Mines, Mr Bakani Motlhabani.
  Speaking during a media mine tour in Orapa on Monday, Mr Motlhabani said there was a value chain to the diamond business, adding that there was an upstream chain where diamonds were produced through mining such as in Botswana which sold rough diamonds.
He also said there was the midstream chain where activities included valuing, sorting and polishing as well as the selling of polished diamonds.

The downstream value chain, he said, added value because in a value chain, value would be added as work on the product continued. He gave the example of diamond jewellery manufactures. Mr Motlhabani also noted that as value would be added, a different price would be attracted.
Government, he said, did make progress in making sure that aggregation was done in the country, and that Botswana would be moving down the value chain.

He said if Botswana could continue to go through the whole value chain and start to do more value addition such as jewellery manufacturing and jewel retail, the country could continue to add value to its diamonds. Value, he said, was dependent on the value chain and where value was added.
Futhermore, Mr Motlhabani said the company has never experienced any cases of substitution of diamonds of high value with diamonds of low value from elsewhere.

“With the controls that we have, we are confident that the controls are working to the extent that there is no opportunity for anybody to be able to come with a foreign product and substitute it to get a higher value product from our operations or downstream as our product moves to market,” he said.
 He said it was a risk that needed to be managed, but that they had never had such cases.
With regard to the closing of the Damtshaa mine and trading conditions, he said operating the mine needed to be stopped and to operate with existing facilities. He said as such the company experienced a gradual improvement in trading conditions.

Market volatility, he said, was normal to the company, adding that it was the market environment within which the company operated.
Mr Motlhabani said it was critical to continue to monitor the market and respond accordingly from time to time.
He said flexibility was key, adding that it was essential to read the market and respond appropriately.

The company, he said, had experienced a robust and gradually improving market in 2017, hence the decision to have Damtshaa re-opened.
He said Debswana had invested on a care and maintenance programme at Damtshaa with an annual investment of P20 million. That, he said, had worked for the company and had put it in a good position to re-start the mine on time.
He added that synthetic diamonds were a threat, noting that in the past there were cost and technology limitations.

With the company partners and DeBeers, he said they continued to look at how they could respond to the threat.
Mr Motlhabani said they had been able to respond well to the threat, noting that there was need to invest in strategies that could deal with it in the future. ENDS