*Board appointed and CEO identified
* DTP platform to be used for auctions
Government has formed a new private diamond trading company that will purchase, market and sell the 10 to 15 percent portion of Debswana production that the state is entitled to through the new marketing agreement signed with De Beers last year.
Styled Okavango Diamond Trading Company, the new company is expected to independently auction an estimated $300 million (P2,250 million to $350 million (P2,625 million) worth of diamonds on the open market per annum from Debswana's average $3 billion-a-year supply. In his Committee of Supply speech to Parliament this week, the Minister of Minerals, Energy and Water Resources, Ponatshego Kedikilwe said his ministry had completed the incorporation of the private company, which is wholly owned by government.
"The interim board of directors of the company has been appointed and the appointment of Chief Executive Officer will follow suit immediately as the potential candidate to set up the company has already been identified," Kedikilwe said.
Under the 10-year deal signed in September last year, the Government of Botswana will buy 10 percent of Debswana run-of-mine production and sell it independently through open tenders outside the traditional DTC framework. The government's portion will rise to 15 percent over a four-year period.
As part of efforts to turn Gaborone into a world recognised diamond centre, the government has already given the green light to Lucara Diamonds and Firestone Diamonds to sell part of their production by open tender outside the DTC
Lucara's AK6 Mine expects to produce 400,000 carats in its first year of production next year, a part of which will be sold in Gaborone through the tender system.
The selling of the AK6 production on the open market will add flavour to Gaborone's fledgling diamond market that was kick-started by Firestone Diamonds in December 2010.
Firestone, which recently put its BK11 Mine on care and maintenance, has so far conducted four tenders at the Diamond Technology Park (DTP) in Gaborone.
On the 'market verification' auctions, Mmegi is informed that government has earmarked the P18 million diamond trading facility that is currently under construction at DTP to carry out the auctions.Sources told Mmegi this week that negotiations between government and Safdico, the proprietors of the new trading platform, were already at an advanced stage.
Infrastructure at the three-storey turnkey project that is built on 1,410 square metres will feature sorting rooms, viewing rooms, management offices, a laboratory, a control room, a cafe, technology hardware, diamond equipment and internal security systems, including CCTV and access control. Although Kedikilwe did not give timelines, the incorporation of the company and the negotiations with Safdico will add impetus to Botswana's ambitions to start the auctions.
Five months after the deal was sealed, last month De Beers said it was still holding 2,2 million carats of diamond supply that belongs to the Government out of Debswana's 22 million carats production in 2011.