COMPANIES
De Beers, Botswana in deal
Posted Tue, 23 May 2006
De Beers chairperson Nicky Oppenheimer and the Botswana government will launch a new joint venture company, the Botswana Diamond Trading Company, on Tuesday, De Beers said.
A number of new mining releases are also to be signed. The diamond partnership between the two goes back to before the country attained independence from Britain in 1966.
The day will mark 50 years of De Beers' exploration in Botswana, which has resulted in four mines, one the largest, one the most valuable in the world, and two smaller ones. Botswana is now the world's largest diamond producer, providing De Beers' Diamond Trading Company with 31-million carats of mostly gem diamonds each year. Its sales, exclusively through the DTC, equate to roughly 35 percent of the world's diamonds. Ways of exploration have advanced dramatically over the years. Flying aeromagnetic surveys reveal deposits that the old time diggers and prospectors would probably not have found. Latest in
the De Beers exploration armoury, a slow flying airship, is able to survey vast areas more effectively and economically.
On Tuesday it will overfly the Gaborone International Conference Centre to mark the anniversary. The Botswana DTC (BDTC) is the result of lengthy negotiations spurred by Botswana's desire to get more out of its diamond industry through marketing and cutting and polishing as mining production levels off. The new agency will supply an initial four cutting factories which De Beers has encouraged its sightholders to set up in Botswana. The BDTC will make up boxes for De Beers sights in London and there has been speculation that it will itself hold international sights, although this has yet to be announced.
Diamonds have fuelled Botswana's development, but the capital intensive industry employs less than 1.5 percent of the workforce. Botswana has an enviable balance sheet, credit ratings better than many European countries, but rising and
persistent unemployment. The cutting and polishing is seen as one way of generating jobs. The rise of the industry has made Botswana overwhelmingly dependent on diamond revenues — in 2004/05 to the extent of a direct 35 percent of gross domestic product, 72 percent of export earnings and 50 percent of government revenues. Indirectly the contribution is much more. For many years Botswana has spent heavily on programmes to diversify the economy. The landlocked country with its non-diamond economy overshadowed by South Africa — and until things went economically wrong in that country — Zimbabwe, has not had much success. It was this reality that spurred Botswana to diversify within its diamond industry and encourage more exploration for all minerals.
Sapa
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