Mindset change needed for efficient diamond beneficiation
When my Social Studies teacher announced one mundane morning, many moons ago, that I’d be one of two students from my class to travel some 200km for an educational tour of the richest diamond mine in the world, I was beside myself with excitement.
The prospect of physically seeing the most precious and hardest natural material known to mankind, a rarity for the average Motswana to this day, was mind-blowing for this then 13-year-old Form 2 student. My usually dependable imagination just could not bring to life the unseen!
I mean, these sought-after minerals are still the backbone of our economy, the sole reason I was enjoying access to free education in the first place, along with other benefits; privileges “children elsewhere in Africa could only dream of”, the ‘elders’ would say.
Indeed, stories of deprivation in the continent were used to lay a guilt trip on our young minds to reverence diamonds, thus the valuable gems became like a God: I recalled that David, in the books of Samuel and Psalms, calls God his Rock.
So, Botswana’s precious ‘rocks’ enjoyed and continue to enjoy an eternal and mighty status, as the De Beers tagline coined by Frances Gerety 77 years ago went, ‘A Diamond is forever’.
They were regarded as a refuge and a fortress, providing protection from the misfortune witnessed across the motherland where conflict diamonds, reportedly, caused more grief than good.
To their credit, our folks were right. Our forever sparkling diamonds have afforded us development success and ensured us stability and ultimately peace, which earned us the moniker ‘the shining example of democracy’.
However, the advent of synthetic or lab-grown diamonds threatens to dim that bright sparkle.
Founding CEO of Diamond Gems and Publisher of Diamond Gems Weekly, Avi Krawitz, during last Friday’s panel discussion hosted by the Botswana Diamond Manufacturers Association (BDMA) at Molapo Showcase, said synthetic diamonds are among the three major reasons for the Diamond industry’s current slowdown.
An expert consultant in the global diamond industry, Krawitz said, “We know that prices have come down in 2023… those high prices were also a reflection of the high inventory levels that we saw. We can split it into industry-related issues: issues within our control and external factors. The three big ones are: slowdown in the U.S. economy – consumers are faced with higher prices, consumer goods inflation, interest rates; there’s been a shift in priorities among U.S. consumers as a result of a weaker U.S. economy. Second big issue is the slowdown in China, third is lab-grown diamonds, which have had a bigger effect on the natural diamond industry than we expected,” he explained, adding geopolitical volatility – Russia/Ukraine and Israel/Palestine crises – feed into the global uncertainty, which negatively impacts luxury buying.
A natural diamond advocate, Krawitz admitted the extent to which lab-grown diamonds gained market share in the last two years took most by surprise.
“Initially, we all predicted that lab grown [diamonds] would find its place in the cheaper, smaller goods in the lower fashion jewelry products, but bridal has been affected by lab grown and that’s a big concern at the heart of the diamond industry. The natural diamond industry has a wonderful story to tell and we’ve got to tell that in a sexy, creative way that is engaging with the consumer; passive marketing is no longer effective; it’s a much more dynamic consumer environment,” he said.
To this end, Krawitz said he is looking forward to De Beers’ marketing campaign message for the festive season.
“It’s the value proposition of the natural diamonds and emotions that natural diamonds can evoke, we have to tap into that in our messaging; how is a manufacturing company able to supplement a brand’s message? We need to talk about the positive stories, especially for a country like Botswana that’s highly impacted in spite of having its highly valuable resource, which is natural diamonds,” he said, noting perhaps real mindset change should be in the beneficiation exercise.
Despite this, Krawitz reiterated that ours has been a success story.
“What we were talking about when ODC began was rough trading; introducing auctions and rough sales outside of the De Beers structure in Botswana. What’s missing here is a dealer market and I think that’s the next big change. The big challenge for Botswana is to take the next beneficiation step, it encourages locals to get into to the industry, that’s why in Johannesburg, for example, the beneficiation industry is about entrepreneurship; it needs to be a more efficient trade, a more dynamic trading environment.
What this does is that it encourages young Batswana to get into the industry in some way; the heart of the industry is the dealer market,” he advised, and implored the 29-member association, industry and government to start thinking along those lines.
BDMA Chairman and Business Development Manager at KGK Diamonds Botswana, Siddarth Gothi, concurred.
“If you look at the generations, people around 50 years of age, they were afraid to talk about diamonds. Only people who have either seen or touched or talked about diamonds are the guys who are in the industry, particularly the citizens of Botswana. That mindset has to change; children should learn about diamonds at school level. The country leads the diamond race but is not yet there because of this missing factor.”
Riki Solanki, BDMA Treasurer said BDMA has been working closely with the government in policy decision-making in order to sustain a serious midstream diamond industry.
“Things are moving slowly yet in the direction right. Our members have been instrumental in Diamond beneficiation and have put in serious efforts to make Botswana a destination of choice.”