Bots wants share of cutting, polishing

GABORONE – The world’s largest producer of diamonds wants more bang for its bling.

A company launched Tuesday will market and sell about 15 per cent of Botswana’s diamonds to manufacturers who have set up cutting and polishing factories in the southern African country. Very little diamond polishing and cutting, which increases a diamond’s value by 50 per cent, has been based in southern Africa.”This is a truly significant event that heralds a significant new beginning,” said President Festus Mogae, who steps down at the end of the month.”For the citizens of Botswana it will bring increased employment and training opportunities.It will provide government with significant revenue stream to finance further development.It will also raise our global profile,” he said.The new Diamond Trading Company of Botswana is expected to sell US$375 million in rough diamonds this year and US$550 million by 2010 to 16 manufacturers.”What we are embarking on is nothing less than one of the largest transfers of skills and commercial activity to Africa ever seen,” said De Beers chairman Nicky Oppenheimer.”The diamond industry’s centre of gravity is shifting and tonight we see it shifting here.”All sorting and valuing of diamonds produced in Botswana by Debswana, a joint venture between De Beers and Botswana’s government, will be now done at the US$83 million state-of-the-art plant in the capital, Gaborone.In addition by next year, all De Beers’ sorting and aggregating operations will be based in Botswana.”This is no ordinary sorting and valuing facility,” said De Beers managing director Gareth Penny.”This is the most sophisticated building of its kind in the world today.Penny said the initiative will create about 3 000 jobs and it is estimated that the value of economic activity resulting from the rough diamonds sold will be about three percent of Botswana’s GDP while about US$6 billion worth of uncut gemstones will pass through the new building.The company is jointly owned De Beers and the Botswana government is part of a regional move to ensure mineral-rich countries benefit more from their natural resources.”We think countries are right to aspire to use as much of their natural resources to generate more value,” said Sheila Khama, chief executive officer for De Beers Botswana, in which the Botswana government has a 15 per cent share.”And it serves our business interest” to support such moves.A similar diamond trading company was set up last year between the Namibian government and De Beers.Last month South Africa established the State Diamond Trader, which will acquire 10 per cent of locally produced diamonds for resale on the local market.Southern Africa accounts for more than 40 per cent of the world’s rough diamond output – Botswana alone has 22 percent of the market, worth about US$3,5 billion a year.Yet Botswana, a country almost the size of France or Texas with a population of about 1,8 million, has an unemployment rate of about 20 per cent.Nearly a quarter of the population lives on US$1 a day and about a quarter of the population is HIV positive, putting even more pressure on the economy.Kabo Ramatludung, a 23-year-old training as a cutter in Gaborone, had been selling puppies to earn money.Diamonds offer a better future, said Ramatludung, who has a younger sister to look after, and no parents.If he passes his six-month training period, he will be given a job.Diamonds “are so bright and attractive.I always wanted a chance to work them,” Ramatludung said, the light glinting off his fake diamond earring.Traditionally diamonds have been cut and polished in centres such as Antwerp and Tel Aviv.But increasingly less cutting is done in Europe, with lower-cost centres opening up in India and China.With high labour costs, southern Africa was not seen as competitive and there was initial resistance by the diamond industry to regional governments’ calls to bring more of the diamond industry to the source.However, governments have insisted.Two years ago, when it came time for De Beers to renegotiate its mining licences in Botswana, one of the conditions was to help develop local processing industries.- Nampa-APVery little diamond polishing and cutting, which increases a diamond’s value by 50 per cent, has been based in southern Africa.”This is a truly significant event that heralds a significant new beginning,” said President Festus Mogae, who steps down at the end of the month.”For the citizens of Botswana it will bring increased employment and training opportunities.It will provide government with significant revenue stream to finance further development.It will also raise our global profile,” he said.The new Diamond Trading Company of Botswana is expected to sell US$375 million in rough diamonds this year and US$550 million by 2010 to 16 manufacturers.”What we are embarking on is nothing less than one of the largest transfers of skills and commercial activity to Africa ever seen,” said De Beers chairman Nicky Oppenheimer.”The diamond industry’s centre of gravity is shifting and tonight we see it shifting here.”All sorting and valuing of diamonds produced in Botswana by Debswana, a joint venture between De Beers and Botswana’s government, will be now done at the US$83 million state-of-the-art plant in the capital, Gaborone.In addition by next year, all De Beers’ sorting and aggregating operations will be based in Botswana.”This is no ordinary sorting and valuing facility,” said De Beers managing director Gareth Penny.”This is the most sophisticated building of its kind in the world today.Penny said the initiative will create about 3 000 jobs and it is estimated that the value of economic activity resulting from the rough diamonds sold will be about three percent of Botswana’s GDP while about US$6 billion worth of uncut gemstones will pass through the new building.The company is jointly owned De Beers and the Botswana government is part of a regional move to ensure mineral-rich countries benefit more from their natural resources.”We think countries are right to aspire to use as much of their natural resources to generate more value,” said Sheila Khama, chief executive officer for De Beers Botswana, in which the Botswana government has a 15 per cent share.”And it serves our business interest” to support such moves.A similar diamond trading company was set up last year between the Namibian government and De Beers.Last month South Africa established the State Diamond Trader, which will acquire 10 per cent of locally produced diamonds for resale on the local market.Southern Africa accounts for more than 40 per cent of the world’s rough diamond output – Botswana alone has 22 percent of the market, worth about US$3,5 billion a year.Yet Botswana, a country almost the size of France or Texas with a population of about 1,8 million, has an unemployment rate of about 20 per cent.Nearly a quarter of the population lives on US$1 a day and about a quarter of the population is HIV positive, putting even more pressure on the economy.Kabo Ramatludung, a 23-year-old training as a cutter in Gaborone, had been selling puppies to earn money.Diamonds offer a better future, said Ramatludung, who has a younger sister to look after, and no parents.If he passes his six-month training period, he will be given a job.Diamonds “are so bright and attractive.I always wanted a chance to work them,” Ramatludung said, the light glinting off his fake diamond earring.Traditionally diamonds have been cut and polished in centres such as Antwerp and Tel Aviv.But increasingly less cutting is done in Europe, with lower-cost centres opening up in India and China.With high labour costs, southern Africa was not seen as competitive and there was initial resistance by the diamond industry to regional governments’ calls to bring more of the diamond industry to the source.However, governments have insisted.Two years ago, when it came time for De Beers to renegotiate its mining licences in Botswana, one of the conditions was to help develop local processing industries.- Nampa-AP