Mmegi Online :: Govt revenues from Debswana near P6bn
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Last Updated
Friday 07 December 2018, 14:23 pm.
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Govt revenues from Debswana near P6bn

Government's income from Debswana reached US$701 million (P5.96 billion at current rates) last year, representing a 35 percent drop from the US$1.08 billion (P9.2 billion) recorded in 2011, Mmegi Business has learnt.
By Staff Writer Sun 09 Dec 2018, 22:39 pm (GMT +2)
Mmegi Online :: Govt revenues from Debswana near P6bn








Government, an equal equity holder in Debswana together with De Beers, counts its revenue from the diamond giant in the form of taxes, royalties and dividends.A De Beers' report released on Tuesday indicates that Debswana's revenue contribution last year was the lowest since 2009 when the diamond producer paid out US$475 million (P4.03 billion). The report categorises revenue contributions as taxes, royalties and charges.According to the report, the US$701 million in government's earnings last year was from 20.2 million carats recovered during the year. By comparison, the US$1.08 billion in 2011 earnings were off the production of 22.9 million carats.In the report, which details De Beers socio-economic impact, executives attributed the lower payout to an overall drop in rough diamond prices during 2012. According to the report, rough prices rose 29 percent in 2011, but then fell 12 percent in 2012.

"This price decrease, reflecting diminished demand, changing product requirements from sightholders and reduced availability of some goods, resulted in a 15 percent decrease in rough diamond sales," the report reads."As a result, our payment of revenues to governments, suppliers, employees, shareholders and other finance providers decreased in 2012 from 2011". De Beers' rough diamond sales in 2012 were pegged at US$5.5 billion (P47 billion at current rates) from US$6.5 billion (P55.3 billion) in 2011. Of the 2012 total sales figure

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of US$6.07 billion, 86 percent was paid to governments, suppliers, employees, shareholders and other finance providers.

For the first six months of this year, De Beers' rough diamond sales were measured at US$3 billion (P26 billion) supported by a six percent increase in prices."These revenues represent our single biggest economic impact and provide a catalyst for economic activity and investment," the report reads.They create multiplier effects, which maximise the economic value gained from the extraction and sale of diamonds, and support the development of infrastructure and capabilities that will continue to deliver value beyond the life of the resource."In the report, executives said efforts were ongoing towards the full relocation of diamond sales activities from London to Gaborone, with the inaugural sight (auction) planned before year-end. "Migration will continue throughout 2013, and by the end of the year our first sight - selling worldwide production to local and international sightholders - will be held at our new facilities in Gaborone," the executives said.

"This unprecedented geographic shift in the sale of rough diamonds will strengthen the foundations for the diamond trading, cutting and polishing, and jewellery manufacturing industries across the southern African region".Besides the relocation activities, De Beers executives said the global diamond giant continued its focus on Botswana during 2012 with significant investment in exploration and mine-life extension.

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