Cut 8 to pump P301bn into Botswana economy

Mbongeni Mguni | Wednesday November 25, 2015 16:07

Commissioned by De Beers, the report was released this week at a conference held to celebrate the 46-year partnership between the global diamond giant and the government of Botswana.

Known as the Cut 8 project, the expansion of the Jwaneng Mine pit will uncover a further 105 million carats of high quality diamonds between 2017 and 2029.

This week’s report represents the first time an assessment of the economic benefits of the Cut 8 project have been attempted.

“Cut 8 is a crucial project for long-term global diamond supply, which is forecast to decline after 2020,” the report reads.

“It is also a crucial project for Botswana’s economy and jobs creation.”

Besides the US$28 billion, PwC also estimates that the Cut 8 project will generate an additional contribution of US$3 billion over the same period in spending by suppliers and employees.

Therefore, the total contribution of Cut 8 to Botswana’s economy during the operational phase is estimated to be more than US$31 billion.

“For every person employed directly on the project, at least three jobs are estimated to be supported elsewhere in Botswana’s economy. In total, Cut 8 is projected to support more than 4,500 jobs per year during the operational phase, either directly or indirectly,” the report reads.

Stakeholders at the conference hailed the partnership between government and De Beers, citing it as the “longest and most successful in the world”. In a communiqué issued yesterday, conference delegates said the partnership had helped government share the benefits of diamond extraction with Batswana.

“The partnership contributes 25 percent of GDP, and provides one in 20 jobs in the country,” reads the communiqué.

“Botswana has built high standards of governance and political stability over the last 40 years. The investment of mineral revenues into human, physical and financial capital has contributed to the success of harnessing diamond extraction for development.

“But to maintain these advantages strong governance of the macro economy should be reflected within micro economic enterprise.”

The delegates said the partnership had led to an opportunity for Botswana to build upon beneficiation and become a continental leader on extraction and a hub of expertise on mining.

“Diamonds are not the only thing that shine, and the people of Botswana are an even more important resource to invest in and capitalise on to truly connect resources and society,” the communiqué reads.