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Diamantaires eyeing Botswana for investment - Expert

Publishing Date : 02 March, 2015

Author : VINCENT MATUMO

Todd Majaye


Botswana’s positioning as a major diamond centre is enticing major investors from around the world who are however stifled by shortage of Diamond supply. This is according to diamond expert, Todd Majaye who also posits that Botswana has to focus on giving the industry to its citizens.


“There are more than 10 big companies, even bigger than Sightholders, who want to come and set up in Botswana but the supply (diamonds) is taken up by Sightholders.”


 “The mandate of Okavango (Diamond Company) has to be changed or expanded; it should now be used as an empowerment tool,” adding that “right now it is not easy to buy diamonds if you are a small trader because the packets will be too expensive for you. Sight holders should be cut off (from ODC) because they have De Beers diamonds,” declares Majaye.


ODC was set up to open access to Botswana’s diamonds, drawing in diamond buyers from around the world to each sale, with a view to generating business for the domestic service sector in hospitality, tourism and transport, as well as stimulating further investment and opportunities in diamond industry services.


In 2011, for the first time, it was agreed that the Botswana Government and its partners at De Beers Diamond Company that the country would independently sell 10 percent of the Debswana run-of-mine production increasing by 1 percent each year to 15 percent in 2016. De Beers also agreed to relocate Diamond Trading Company International (DTCI) from London to Gaborone by the end of 2013, which subsequently took place as schedule.


In an interview with BusinessPost, Majaye, who is the Director of Afrimond Diamond and Jewellery Institute, says that Botswana’s diamond beneficiation objective is being achieved “but we are not working hard enough to benefit from the full potential of it; we need to advance the industry further.”


“There are no statistics but I know of many businesses and partnerships that have been created directly as a spinoff of the diamond sales taking place here.”


Majaye, who was instrumental in the advocacy for the reforms in the agreement, says that institutions are continually sending the staff for training at Afrimond, a sign that the industry will soon have local institutional investors. “We need institutional investors in the diamond business because it will make money to flow and more businesses will spring out from that.”


. The P50 billion pula annual business stands to have a multiplier factor of two and a half times (P130 billion), if harnessed fully, according to Majaye.


Majaye says that the main objective that the country should pursue is to create entrepreneurship in the Diamond industry rather than trying to create employees for the business.


“We said we are building a global diamond centre and such a centre is where various processes of the diamond pipeline take place; cutting, polishing and jewellery making, but we are in better position than other centres because we have mining”


Majaye said: “We need to change the perception that diamond trading is for big people; We should have broader trading activities, with large scale traders including Sightholders, as well as medium and small traders”


“We need to come aggressively with a robust training policy and this training should not be about jobs only but we should be training entrepreneurs, this policy should be about teaching people holistically to become entrepreneurs,” adding that, “we should be a labour sending nation and receive remittances from around the world”


On the subject of beneficiation, Majaye said that the beneficiation was a success, albeit more should be done to harness the full potential of the industry.


“The beneficiation is working, but we are not yet doing enough as a nation to benefit from the potential spin offs of diamond sales being located at home”


“Beneficiation must be driven by people with a vision and this is the private sector; Government must remain as a regulator and stakeholder.


Majaye also said that the industry is very viable and that recent closure of Teemane Diamond Company should not send jitters to the potential investors.


“Closures are common in every industry it does mean the industry is falling; even if five companies leave, there are bigger players coming in.”


Majaye said that location of the firms is very important, emphasising that for now, factories should be situated in urban areas where there are facilities such as airports.


“Gaborone, Francistown and Maun with the tourism factor, are ideal places for diamond factories to be set up and Government must be more proactive about getting more ideas from different people, for development”


Majaye cites the closure of the Serowe based diamond manufacturing company, Teemane Diamond Company, which closed in early February 2015, as an example of what will happen if there are no deliberate efforts to make Batswana owners of the diamond business.


The now defunct Teemane Diamond Company, earlier this year, released a statement that the industry is still very vibrant, but the company had to close due to commercial pressures which include “the problem of polished diamond prices that are too low for the current high rough prices. The Serowe based diamond manufacturer, which left 320 employees jobless when it closed down in early February this year, was the biggest diamond manufacturing firm in Southern Africa.


Majaye also thinks that Botswana should open its doors to diamonds from the region, particularly Zimbabwe as the northern neighbor is now compliant to the Kimberly process and European countries such as Belgium have embraced diamonds mined from there.


Botswana’ diamond story which began in the late 1960s culminated in the Diamond Technology Park which was opened in 2008 along with the Botswana Government’s Diamond Hub. In 2011, Botswana became a full member of the International Diamond Manufacturing Association and hosted its annual conference in Gaborone.

In 2008, the Botswana Government clustered a number of major development projects into six hubs to attract internal and external investment while a Diamond Hub was established to facilitate beneficiation and promote Botswana as one of the world’s major diamond trading centres.

Afrimond Diamond and Jewellery Institute was established with the sole aim of bridging the diamond and jewellery knowledge and skills gaps that exists within the African continent and this achieved has been achieved in several countries, such as Zimbabwe and South Africa, through training, consultancy, research and networking.

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