Disruptor disrupted: HB’s pains and hopes

Mbongeni Mguni | Monday November 2, 2026 06:00

The high-flying firm invested millions in state-of-the-art equipment in Gaborone, built on the promise of a supply deal from the Okavango Diamond Company (ODC). HB Antwerp also expected a capital injection via government purchasing a 24% stake in the young Belgian firm.

At some point, Ministry of Finance notes show that at least P800 million was targeted for the stake.

However, a change in government in October 2024, a deepening downturn in diamonds and a new strategy for the precious stones have left HB Antwerp in the proverbial lurch. The supply deal did not materialise, the equity stake was not taken up, and instead, a downturn from 2023 has left Lucara as HB Antwerp’s only client in the country.

Mmegi: Please provide a short brief on HB’s activities in Botswana, given the challenges in the diamond market in the past three years.

Lev: HB Antwerp established its Botswana operation with a clear objective: to help the country of origin retain more of the value of its own natural resources by moving more of the diamond value chain into Botswana and building local capability in advanced manufacturing, technology and data.

Genesis HB Botswana commenced operations in 2023, our first facility outside Antwerp. It was built around a technology-driven model covering scanning, planning, cutting, polishing, grading, and the data infrastructure that sits behind all of it.

The market has been under sustained pressure throughout that period: weak demand in China, lab-grown stones taking share at the lower end, and too much stock held through the pipeline. Producers are selling rough into an opaque market at the worst point in the cycle, and the midstream is being squeezed between the two.

Our view is that this is precisely what should force the industry to change. Linking what the producer receives to the value the polished stone actually achieves, with full traceability behind it, gives the producing country more of the value and gives the consumer a reason to choose a natural diamond. That is the model we have built, and it is the model operating successfully with Lucara since 2020.

Mmegi: What is the size of HB’s presence in Botswana in terms of employment, investment and output?

Lev: We have invested more than $20 million to Botswana to date. Over $10 million of that is in technology and infrastructure: the most advanced diamond manufacturing facility in the country, and it remains in the country. More than a further $10 million has gone into operating the business, most of it in salaries for Batswana employees, paid at the top of the sector, and in training. We carried that cost for several years ahead of the volumes the facility was built for.

The investment in people matters as much. We recruited Batswana graduates, a significant number of them engineers, and trained them both in Gaborone and at our academy in Antwerp. Those are capabilities that did not previously exist here at that level.

The facility and the technology were built for volumes well beyond what the current supply environment allows us to run, and we are ready to scale back up if the supply position changes.

Mmegi: How has this presence been affected by market conditions?

Lev: The downturn has affected both the availability and the economics of rough diamond supply, and the demand for polished.

For us, the supply point is the decisive one. Our investment in Botswana was made on the basis of a long-term integrated local value chain. The economics of that investment depend on having enough rough to run the technology, to employ and train people at scale, and to generate the downstream value the facility was designed for.

We have therefore had to resize the operation to the conditions we actually face. That is a resizing, not a withdrawal. Our technology and infrastructure stay in Botswana – we are not sending machinery back to Belgium – and the people who remain will continue to operate the full platform and maintain the capability we have built.

None of this changes the underlying proposition. If anything, it demonstrates the point we have been making for three years: no downstream operation anywhere can be built without secure, sustainable rough supply behind it.

Mmegi: HB has been negotiating supply from the Okavango Diamond Company. What has been the outcome of these negotiations?

Lev: What was announced in 2023 has not materialised. The government has stated its own position publicly, and we have planned around the position as it stands rather than as it was announced.

We hold no grievance about that. What matters to us now is route to market. The model has worked for Lucara, and it has increased the value flowing back to the producer, and through that to Botswana. We would welcome the opportunity to work with ODC, and with other producers, on a supply partnership built on the same basis. That remains open from our side, and that is where our focus is.

Mmegi: If the supply has not been secured, how does this impact HB’s future in the country, particularly the number of Batswana employed in-country?

Lev: The absence of that supply has had a direct and material effect on what the Botswana operation is able to sustain.

We therefore undertook a restructuring and resizing exercise to align the operation with the resources actually available to us. That process was conducted under Section 25 of the Employment and Labour Relations Act, with notification to the Commissioner of Labour, through a formal consultation with both the recognised union and the non-unionised employees. It concluded in September with a settlement agreement reached with the Botswana Diamond Workers Union, and the affected employees were notified on September 25.

It was a difficult exercise, and I will not pretend otherwise, because behind every position is a person and a family. Our objective throughout was to preserve as much employment and as much capability in Botswana as the business can presently support, and to treat the people leaving properly on the way out. I believe we did both.

What I would not want anyone to take from this is that HB is walking away from Botswana. We are not. The technology and the infrastructure stay here, the employees who remain operate the full platform, and the scale of employment from here will depend on the availability of rough supply.

Mmegi: How has HB been able to continue securing steady pricing for Lucara even in a constrained market?

Lev: The difference is in how the stone is priced.

A conventional rough transaction tries to establish the value of a rough diamond before anyone knows what it will actually yield. Our model works the other way round. We use scanning, planning, and manufacturing technology to determine the potential polished outcome of the individual stone first.

Under the partnership with Lucara, the initial purchase price is based on an agreed estimate of that polished outcome, supported by external benchmarks and Lucara’s own historical special-stone sales data. Once the diamond is polished and sold, the value actually achieved feeds back to Lucara through a further payment, on the agreed commercial terms. The result is a much closer link between the value the polished diamond generates and the value the producer receives.

It also gives better predictability and far more visibility into the characteristics of each individual stone. We do not treat a rare Type IIa diamond as an anonymous unit of rough production. We analyse its specific potential and build the manufacturing and commercial process around what we find. The 10-year agreement covers qualifying Karowe diamonds above 10.8 carats.