DTCB closes in on first non-Debswana deal

Mbongeni Mguni | Monday July 17, 2023 06:00

Established in 2006, DTCB has been limited to only sorting and valuing stones from Debswana, before selling these to De Beers and the state-owned Okavango Diamond Company.

In the years since its establishment, DTCB’s operating position has tightened due to the fact that while its state-of-the-art plant is built to process 45 million carats per annum, Debswana’s production has averaged well below 30 million carats since 2008, in line with a policy where the mines produce only to match demand.

Last year, Debswana production was pegged at 24.1 million, the highest since 2018.

The restrained output has forced rationalisations and reorganisations at DTCB, including the axing of 75 workers in 2015.

DTCB managing director, Sedireng Serumola, told BusinessWeek the deal with the non-Debswana producer was being finalised with a possible agreement by year-end or early next year.

He declined to provide further details citing the sensitivity of negotiations, but said the producer was “from outside the continent”.

“It’s a first step for us and we would like to be able to finish this year, but we are still in negotiations and these can take a while,” he said in an interview on Tuesday, on the sidelines of a tour by American institutional investors to the DTCB. “We will sort and value for them, but not sell for them. “I cannot speak on the caratage or other details involved given the sensitivities of the negotiation, but when we are ready, we will be happy to have conversations with you.”

The DTCB’s hunt for opportunities outside Debswana comes as other emerging diamond producers, especially in Africa, seek to replicate Botswana’s success in processing diamonds. Countries such as the Democratic Republic of Congo have sent high-level delegations to Botswana to benchmark on how to establish diamond processing activities within their borders.

Serumola said having highly skilled workers and advanced technology gave DTCB the edge in its efforts to expand its capacity utilisation.

“One of the things that helps us and will still be helpful going forward is technology. “The diamonds when they are coming from the mines, come in huge volumes but some of them are small to the level of sugar. “That’s where technology comes in to sort that and look for the quality within. “We have the capacity to be able to do diamond sorting and valuation in Botswana and the next step is a challenge for us to say a few years down the line, to what extent you have developed skills in Botswana,” he said.