26 Nov 2013

In 2006, Botswana and De Beers signed a series of agreements paving the way for relocation of diamond downstream activities from London to Gaborone.

That year alone, De Beers and the government signed three agreements; renewing mining leases for Debswana for 25 years, sale of Debswana production to Diamond Trading Company International (DTCI) for another five years and the establishment of Diamond Trading Company Botswana (DTCB).

It was the latter agreement that excited Botswana as it meant diamonds would be sorted and valued here and further downstream activities would be created when sightholders, De Beers clients, set up their diamond cutting and polishing industries in the country.

The P471 million DTCB’s magnificent building purposefully located few kilometres from the main airport, is the largest and most sophisticated facility in the world. The company sorts and values Debswana production only, which in 2006 hit a record 34 million carats before the global economic recession negatively affected the mining industry.

Former Minister of Minerals, Energy and Water Resources and now Vice President, Dr Ponatshego Kedikilwe, was in 2007 given the DTCB Key by the then De Beers Chairman Nicky Oppenheimer.

Anglo American has now acquired the Oppenheimer shares in De Beers. Being a new industry in the country, the 16 sightholders had to rigorously recruit and train the right personnel hence beneficiation - a new term coined when the De Beers and government negotiated the new agreements - has resulted with skills transfer and technological advances

DTCB managing director, Tabake Kobedi, explained recently that DTCB building, fully constructed by De Beers, has capacity to sort out 45 million carats annually but so far they sorted 16.5 million and the hope was to reach 21 million carats by the end of the year. The number of local sightholders has increased to 21 with the figure of people employed estimated at 3500.

DTCB sells its produce to the government owned Okavango Diamond Company (ODC) and De Beers Global Sightholder Sales (DBGSS). Under the agreement, ODC received 10 per cent originally and the volume increases by a percent every year until it reaches 15 per cent (currently ODC receives 12 per cent).
The latter was given birth following a new 10-year sales agreement after the initial one signed in 2006 expired.

Ms Varda Shine, executive vice president of Global Sightholders Sales, said aggregation and sales to sightholders both within and outside Botswana were done at her company housed in the DTCB building.

She explained that the decision to move diamond sales from London to Gaborone was the most valuable part of the negotiations which started in 2011. At the time, she was DTCB chairperson and also employed at De Beers. She said beneficiation has been an important part of her life.

Recently, DBGSS held its first international sight, which is the selling of diamonds and most of the 82 De Beers sightholders were expected to land in Botswana for the historical event. Ms Shine said they would hold 10 sights per annum with total revenue raised expected to be around P 55 billion (US$5 billion), meaning P5 billion (US$ 500 million) per sight. ENDS