Is A New Era Ahead of De Beers in Africa?

Only a week after Israeli diamantaire Lev Leviev grabbed headlines when he said he is giving African countries what they want – namely a bigger share of the diamond pipeline – Botswana is now singing the same tune as it carries out crucial negotiations with De Beers.

In a potshot at De Beers last week, during a seminar on rough diamonds in Israel, Leviev told a packed hall that he did not understand why producing countries were told they couldn’t sort or polish diamonds. Their own diamonds.

According to Leviev, one of the secrets of his success is that he stuck by his suppliers through hard times and helped them achieve their goals, as they expressed them to him. The Angolan Minister of Resources agreed with him during the seminar, as did the Namibian Prime Minister during the opening of Leviev’s polishing plant in the country earlier this month.

According to a Sierra Leone official, talks with Leviev are underway, and they, too, might find that Leviev is a great listener to their needs.

Against that backdrop, it should come as no surprise that this past Friday Botswana published on a government web site that “Botswana needs to continue wooing investors who are skilled in diamond cutting, polishing and manufacturing”.

The site quotes Sebetlela Sebetlela, General Manager of the Jwaneng Mine, who said that diamond manufacturing is a highly specialized field, which requires the right kind of expertise.

When asked why the country is not processing diamonds he replied: “We do not have a great deal of experience in the field of diamond manufacturing to the extent that others have,” adding that Debswana has left the field to other players as it does not have the skills and competence to do it efficiently.

Nonetheless, Botswana is negotiating very slowly with De Beers over the renewal of the concession. From the miner’s stand point, this contract with an old time partner and minority shareholder of De Beers should have been concluded by now.

It’s not publicly known what Botswana is asking for, but Sebetlela is not discounting the possibility of his country developing a diamond manufacturing industry in the future. “Botswana needs to continue its efforts through agencies, such as BEDIA, to woo investors who are good in the field to come and set up shop here,” he said.

Leviev made a killing listening to his suppliers and suppliers to be. Maybe it’s time for De Beers to hear the tune and accept it, even though it might feel local sorting is not economically efficient or that manufacturing is not its core business.