De Beers to Establish DTC Botswana

The Government of Botswana and De Beers celebrated 36 years of partnership at an event in Gaborone today, and signed a suite of agreements renewing the Mining License for Jwaneng mine, the most valuable diamond mine in the world.

Jwaneng diamond mine

The license will run for twenty five years [effective from August 1 2004]. In addition, the currently held licenses for the Orapa, Lethlakane and Damtshaa Mines have been extended to run until 2029, in line with the Jwaneng License.

During the ceremony, which was held in the presence of the President of Botswana, Festus Mogae, Minister of Minerals, Energy, and Water Resources Charles Tibone and the Chairman of De Beers Nicky Oppenheimer, an agreement covering the sale of Debswana’s production to the DTC for a further five years was also signed.

Including in this alliance is the agreement to establish Diamond Trading Company Botswana, a 50/50 partnership in Botswana between De Beers and the Government of Botswana, which will sort and value all Debswana’s diamond production. In addition, DTC Botswana will carry out local sales and marketing activities to support the establishment of diamond manufacturing operations in Botswana.

De Beers said it will fully fund construction of the new DTC Botswana building in Gaborone at a cost in excess of Pula 400 Million ($83 million).

Speaking at the signing ceremony, Minister Tibone said “These agreements will allow us to maximize economic benefit accruing to the country in a way that simultaneously allows the investor to earn a competitive return on their investment. This therefore underlines the essence and importance of the agreements signed here today.”

Gareth Penny, Managing Director of the De Beers Group, stated, “De Beers fully supports Botswana’s desire to establish a downstream diamond industry, and we are pleased to announce that diamonds will be made available locally for cutting and polishing factories in Botswana. De Beers will work closely with Government, and together, we are excited by the opportunity this ambitious initiative has for further local job creation, while maintaining the full value for Botswana’s diamonds.”

In addition to the establishment of DTC Botswana, De Beers intends to bring diamonds from around the world to be “aggregated” by DTC International in Botswana, an activity that was previously carried out in London. According to De Beers, this reflects the importance of Botswana as the world’s leading diamond producer and the role of government in creating the right environment for business in the country.

Botswana, together with other diamond producing countries in Africa, are pressing hard for the development of a local diamond manufacturing industry. This has the potential to support new jobs, upgrade the country’s infrastructure, and serve as a catalyst to attract other international businesses to Botswana.

Speaking at the press conference, Oppenheimer said, “”It is exciting that this agreement not only extends the length of our partnership, but also its depth, as we move from mining diamonds together, to marketing them together, in Botswana with the establishment of DTC Botswana."

While the agreement is a positive move for Botswana, according to a report in the Guardian newspaper, up to 200 of the DTC's 700 staff in London could lose their jobs when sorting moves to Gaborone.