Botswana Reportedly Not Planning Changes to Diamond Law

Botswana is not planning to follow in South Africa’s footsteps with legislation that would change regulations governing diamond exports, according to media reports in the country.

There has reportedly not yet been any discussion by Botswana authorities on changes to the existing arrangement.

In any case, any amendments, if proposed, may not necessarily be anchored in law but simply agreed by the parties.

According to proposed amendments to the South African Diamond Act of 1986, all rough diamonds will be subject to a 5 percent export duty, and special agreements with major producers, such as De Beers and Trans Hex, will no longer be possible.

The most dramatic proposed amendment is one that would enable the South African Diamond Board to enter into agreements with producers to find the best way to guarantee adequate supplies to the local cutting industry.

The draft law would make it mandatory that all rough diamonds produced in South Africa, which can be cut there, must first be offered to the local industry.

The bill’s implication is that since the current system has prevented most of South Africa’s rough diamonds from being cut in the country, along with the creation of jobs and the development of new skills within the domestic diamond sector.

But sending all South African production to London is a key principle for De Beers, making it likely the diamond giant would fight hard to prevent this amendment from being included in any changes to the structure of the diamond industry, not only in South Africa.

Since 1993, there has been an agreement between De Beers and the Diamond Board that it is allowed to export its production to London and then provide South African Sightholders with the goods they need.

The cancellation of the agreement by South Africa could have an effect on De Beers’ agreements with Botswana since the country also exports its diamonds to England where it is marketed from the ‘London mix’.

De Beers, which has a partnership with the Botswana government in Debswana, has until June 17 to comment on the proposed changes to the South African diamond law.