Beneficiation generates 3,000 jobs ahead of schedule

Brian Benza
Staff Writer | Friday July 25, 2008 00:00

 

Speaking at the release of the De Beers group's half-year results at Orapa House in Gaborone, De Beers Botswana Managing Director Sheila Khama said since the setting up of 16 sightholders as clients of DTC Botswana, 3, 005 jobs had been created, which is 'a milestone achievement'.

'Since the opening of DTC Botswana early this year, all the 16 sightholders are fully operational, except for one which is currently constructing its factory,' Khama said.

'These sightholders have to-date created 3, 005 jobs for Batswana, a target that was initially supposed to be achieved two years from now. In 2008, DTC Botswana will supply diamonds worth over US$375 million to its clients, with the total amount standing at US$650 million for all the sightholders in Southern Africa.

'Apart from the employment opportunities, Batswana have also immensely benefited from skills transfer.'

It was initially targeted that over 3 000 jobs would be created by the diamond beneficiation industry by 2010, and many more through auxiliary services such as banking, security and transportation.

Two international banks, ABN Amro and Anterwep Diamond Bank, have already expressed interest in setting up shop in Botswana to specifically finance the sightholders.

Speaking in a telephone conference from London, during the presentation of the group's results, De Beers Managing Director Gareth Penny said with beneficiation already in action, the group was expecting to sell over US$1.5 billion worth of rough diamonds by 2010 and that the group had every intention of delivering on the beneficiation strategy.

The establishment of DTC Botswana is expected to be a catalyst in the country's vision of long-term growth and diversification of the economy by encouraging the development of new businesses in sectors such as banking, transportation, IT, security and tourism.

DTC Botswana management and shareholders last year agreed on a supply allocation contract for the next three years under which annual supplies worth US$260 million, US$370 million and US$550 million will be released to sightholders in 2007,2008 and 2009 respectively.

From 2009, De Beers will aggregate production from all its mines around the world and in Botswana where it will be put into parcels for sale to customers worldwide.

DTC Botswana will then be the home for the aggregation of all the production from all De Beers mines worldwide and all the mines in which the group has joint venture arrangements. The significant achievements realised in Botswana's beneficiation efforts will prove wrong some traditional cutters and polishers, who had poured cold water on the programme, saying it was difficult to rationalise it until its cost structure was radically changed. 
In an industry already grappling with a huge supply deficit, the traditional cutters and polishers had apparently been stung by the beneficiation programme because it meant further diversion of supply from them to Botswana, Namibia and South Africa.

Meanwhile, in its results for the six months ended June 30, De Beers posted a 10 percent rise in rough diamond sales to $3.3 billion due to strong demand and price hikes, but said it was cautious about the second half. The group said its contribution to the underlying earnings of mining group Anglo American, which holds a 45-percent stake in De Beers, was $166 million, up from $156 million for the same period last year.

An economic downturn in the US, which accounts for around half of all diamond jewellery sales, could have an impact on the second six months of the year, it said.

Strong growth in China, India, Russia and the Middle East, however, has helped balance some of the United States impact.