Diamond talks should not undermine DTCB - De Beers

Brian Benza
Staff Writer | Wednesday February 10, 2010 00:00

 

The existing sales agreement which compels Debswana to sell all of its produce through the DTC, expires in December and negotiations are due to start in a few months.

Speaking to Mmegi in Gaborone yesterday, De Beers group executive director in charge of marketing, communications and the Forevermark Stephen Lussier  said the negotiations should be about 'how we are going to get the maximum value out of the Debswana diamonds'.

'We have a long term relationship with government which resulted in us investing US$ 83million for the DTCB. So I don't think the negotiations should be about undermining the DTC Botswana which we have set up together.

'If we do  that then I am sure De Beers will lose out in one way and government will also lose out in another way,' he added. Lussier dismissed the suggestions that De Beers has not always acted with the intention to ensure maximum value for Batswana for its diamonds.

'We are going into the negotiations not very much worried about the outcome but about the goals that both parties want to achieve. 

'We are going to look at what government wants for its diamonds. Whether it can be alternative distribution, further access to cut more diamonds, more employment or higher platform to trade. 'So we go into the negotiations with a mind to strike a balance between the government achieving all of its goals and us still being able to make a profit because that's why we are here,' he said.

Responding to suggestions that using the DTC price book does not give maximum value to Debswana diamonds, Lussier said 'look at who had the best prices in 2009, it was DTC, some of these companies' prices even crashed by as much as 70 percent.

'We are the premier diamond company in the world with more skills in all areas than any other company and this is why we believe we can assist government to get to where they want and it will not be necessarily achieved by breaking the DTC Monopoly.

 ' I believe we have always acted with the best interest of Botswana at heart.

 'Apart from beneficiation which we were not ready to do at that time because of certain reasons, we have honoured every contract and obligation with our partners,' he added.

Lussier, who is also the Chairman for De Beers Botswana, also went on to say that the new CEO Neo Moroka will be part of the upcoming negotiations and has been roped in to strategically position De Beers in the medium to long term.Lussier describes Moroka as one of the best businessmen in Africa.

'We need to design something that is going to be commercially viable with government and that is the reason why Neo was roped in because of his business experience,' he added.  In a bid to become a world diamond trading centre, Government is trying to break the DTC monopoly and create an alternative diamond market system, which analysts believe will give better value to Botswana diamonds.

Last month, Indian Vice President Mohammed Hamid Ansari was in Botswana on a three-day visit during which two agreements in agriculture and education were signed.

There were also unconfirmed reports of discussions regarding diamond trade having taken place between Ansari and his Botswana counterpart Lt Gen Mompati Merafhe.

With negotiations for a new sales agreement between Government and De Beers fast approaching, there has been pressure from emerging diamond industry players such as India and China to be considered as third party competitors for Botswana's diamonds.   

India is the largest importer of uncut diamonds, but most of them have been routed through the trading centres of Antwerp but Botswana now has ambitious plans to turn itself into a diamond trading centre by opening an independent marketing channel.

Analysts believe this would give Botswana an independent 'window' on the market and enable a better assessment of market conditions, and perhaps provide an opportunity to develop as a centre for the trading of diamonds from other countries.