The Diamond Trading Company Botswana (DTCB) is eyeing the processing of stones from small local diamond mines such as Karowe, Lerala and Ghaghoo as a way of boosting capacity utilisation and steadying its financials.
DTCB, established in 2006 as a joint venture between De Beers and government, is limited by its founding shareholder agreement to only sorting and valuing stones from Debswana, before selling these to De Beers and the state-owned Okavango Diamond Company.
In the years since its establishment, DTCB’s operating position has tightened due to the fact that while its state-of-the art plant is built to process 45 million carats per annum, Debswana’s production has averaged well below 30 million carats since 2008, in line with a policy where the mines produce only to match demand. Last year, Debswana production was pegged at 22.5 million, which represented a three-year high.
The restrained output has forced rationalisations and reorganisations at DTCB, including the axing of 75 workers in 2015. On Wednesday, DTCB managing director, Tabake Kobedi said the opportunities with other producers had been considered, although no formal contact had been made due to the terms of the existing shareholders’ agreement. “One of the things we pride ourselves in is in being the largest and most sophisticated sorting and valuing operation in the world.
“The question is, if we are the largest and most sophisticated, how come we are only focussing on diamonds from Debswana?
“We are doing it because we have a shareholder agreement but we believe the opportunity is there. Why should smaller producers have to start their own sorting facilities when we can offer that,” Kobedi told journalists.
The DTCB’s hopes of loosening its restrictions lie in the upcoming negotiations between De Beers and government over a key sales agreement, which expires in September 2020.
“Look at Kimberly (South Africa) where the resource depleted and what our counterparts did there,” he said.
“They do contract sorting for small operations. When our facility was created, it was at a time when Debswana was producing 33 million carats per annum and now we are at about 22 million carats per annum.
“We have that capacity to be able to do more than we are doing.
“As the leadership, we must recognise that where there are opportunities, we must bring them out and sell them or make other people aware of them.”
The managing director said in the meantime, DTCB would ready itself by focussing on its 2020 strategy, which is anchored on achieving an “operationally excellent processing organisation”.
“My belief is that as DTCB, let’s make sure we can become that process excellent organisation and by the time we go to the Lucaras of this world, we are ready.
“If we can have the organisation world-class, it gives the shareholders the opportunity to see what more they can do with this organisation.
“We are here to serve the shareholders and if we can show that we are more than capable of more, the shareholders should see that as an opportunity.
“I’m hoping we can achieve that through the strategy by 2020,” he said.