De Beers sees tech as game-changer for Botswana
Mbongeni Mguni | Tuesday April 4, 2023 06:00
Tech has levelled the playing field against the traditionally more competitive diamond centres across the world, further says De Beers.
The country currently has 48 diamond-cutting and polishing firms, up from 21 in 2020.
Of these, 38 are De Beers’ clients, known as sightholders, who are under contract to participate in 10 auctions of rough diamonds a year held in Gaborone. Employment figures in the country’s cutting and polishing factories have risen from 2,332 last year to the current 4,001.
The growth is seen as a testament to Botswana’s rising importance in the global value-added diamond industry, where countries such as India have dominated for decades due to their enhanced efficiencies in factors such as labour costs, technology, access to bespoke funding, connectivity and others.
De Beers’ executive vice president for diamond trading, Paul Rowley, told The Monitor that technology was playing a key role in balancing the scales in the industry’s midstream, the portion of the value chain occupied by cutting and polishing firms.
Much of the leap in technology seen in recent years was due to advancements made in India where factories there invested and innovated as a response to the COVID-19 pandemic, he said.
“Technology that’s been developed during COVID in places such as India has enabled us to level the playing field,” Rowley said in response to The Monitor questions during a briefing. “You have seen some of the factory openings where you see that technology in motion and that allows us to quicken the pace and become more sustainable in beneficiation which makes the cost more equal to where it is in cheaper centres like India. “In factories in India, we have seen consolidation as well in some of the bigger ones and those are the big manufacturers that we have encouraged and worked with over the past three or four years to come and set up in Botswana as well as in Namibia and South Africa.”
He explained that De Beers had also been investing in technology over the years, such as through Synova, a company that innovated a water jet-guided laser technology which is being used by some of the local factories.
De Beers’ co-chair, Bruce Cleaver, previously told The Monitor that sustainable midstream activities in producer countries such as Botswana were a priority for the global group.
“We have worked with our sightholders who increasingly embrace the fact that the kinds of goods that are capable of being cut and polished in Botswana, De Beers will not sell to anyone who exports them,” he said. “It’s an incentive and it says if you want those goods from us, you will have to cut and polish in Botswana. “It’s been a symbiotic relationship and we agree with government’s aspirations that as much value as possible, in a natural resource that ultimately will run out, must be kept in the host country.”
Government, meanwhile, has also incentivised the establishment of cutting and polishing firms through initiatives around taxes and rebates around the technology being brought over for the factories. Government has also enhanced the training of artisans for the diamond factories, bringing in expertise to drill Batswana in the country so that the firms would find a ready talent pool to tap into. Office and factory space has also been provided for the cutting and polishing firms.
“With our partnership with De Beers as government, we made sure that there’s a whole lot of relaxation of things that were making it difficult for these factories,” Minerals and Energy minister, Lefoko Moagi previously told The Monitor. “We also went all out to actually incentivise them from where they were, be it India, United Arab Emirates, and everywhere. “The allocations also are more because you need to have access to these rough diamonds to polish, so we made sure we increase whatever they were able to get as rough diamonds.”
Government and De Beers are at the tail-end of negotiations on a new agreement that governs the sales of diamonds from Debswana. The two long-term partners are also negotiating the renewal of mining licences for Jwaneng, Orapa, Damtshaa and Letlhakane, ahead of their expiry in 2029.