Mixed reactions to the new agreement
After prolonged and protracted negotiations, government finally signed a new diamond sales agreement deal with DeBeers Diamond Mining conglomerate on Friday. The deal, which in principle gives Botswana a bigger share of rough diamonds for a period of ten years which extends to 2033 is expected to commence with 30 percent before gradually increasing to 50 percent in the last years of the agreement.
The deal also covers a new 25-year mining license for Debswana-a joint venture between government and De beers. The Voice Reporter, DANIEL CHIDA speaks to a number of people to get their understanding of the deal.
Dithapelo Keorapetse-Leader of opposition in Parliament
We must not play these small games of behaving like an imbecile who has been enticed with coke and Colgate and go to town with that. My view is that the agreement should not just be in principle but must be in black and white. The powers that be should make the details of the deal transparent and open in terms of Extractive Industry Transparency Initiative standards.
They must demonstrate the number of jobs to be created through beneficiation by cutting, polishing and jewellery manufacturing from the more diamonds we will have as a result of this deal. The powers that be must show us how they will increase our stake in De Beers to plus 50% so we own the company and consequently own our diamonds in the true sense.
If they show us how much payment of royalties, taxes and dividends is going to increase and steps taken to clamp down on no, false and under declaration of production in diamonds, it would be good. We must be shown the good numbers of Batswana businesspeople in the diamond industry as owners of mines and big companies involved in mining.
De Beers must commit to more corporate social investment, it has kicked us in the teeth for far too long, aided and abetted by the ruling party which it had kept in its back pocket for years.
This will help in advancing our economy because natural resources are the number one factor that spurs economic growth. The Diamond marketing agreement and the extension of the mining agreement serve a purpose of giving economic stability. The agreement is transformative, and will set Botswana as a Diamond aggregation, cutting and polishing hub of Africa.
The key areas that are covered in the agreement include, Diamond for Development Fund (DDF) which its purpose is to build a legacy beyond mining particularly for communities within which there are mining operations. It will also serve to help diversify the economy by investing in critical sectors of the economy.
The DDF will also help usher Batswana into the diamond sector by creating an enabling environment for Batswana to participate in the middle stream and down stream of the diamond sector of the economy. T he DDF will also create opportunities for Batswana to participate in the diamond value chain, forward and backward linkages. Debeers will also prospect and develop other resources elsewhere ( other countries) with government of Botswana. This will position Botswana as a mining nation and will create more revenue streams for Botswana.
Government is allowed to work with other companies. The past agreement tied us to Debeers in the mining sector. This now means we can court other companies to invest in cutting and polishing and use the new rough stones quota to negotiate long term supply agreements. The agreement gives us 50 percent of the rough stones to market to the rest of the world. This allows us to discover value and build a lasting diamond business around the tough stones. This is set to transform the economy and create jobs in Botswana.
Debeers has also committed to developing the skills set of Batswana in the diamond industry and those who seek to enter the diamond industry. Technology Labs will be relocated to Botswana to create a base to develop skills. The skills developments are not limited to, cutting, polishing, jewelry, crafting and diamond valuing
Joel Konopo- Editor at INK CIJ
We need a balanced approach to understand how this evolving relationship between the government of Botswana and De Beers will lead to job creation for an ordinary Joe Six Pack. Currently the deal between Botswana and De Beers has not clarified to me how an ordinary person in Borobadilepe will benefit from the new agreement in terms of job opportunity. My biggest worry is that by selling diamonds to companies outside the country, the Botswana government through the Okavango Diamond Company (ODC) is actually exporting jobs.
It is still not clear how many jobs were created as a result of the past agreements. If government can explain in clear terms as to how many jobs were created after the 2010 and 2020 agreements, then I will be made to believe that the deal is beneficial to an ordinary Motswana.
Victor Baatweng – Business Editor for The Telegraph
The deal on the paper is a win-win for the two partners being Botswana and De Beers.
A win for De Beers because they have secured a long term mining lease hence providing some form of security to their customers in terms of future supply.
A win for Botswana because it creates an extra room to make more money through the development of the diamond value chain.
While in comparison Botswana is certainly the biggest winner between the two, the government and citizens will have to do a lot of work to ensure that the ‘theoretical win’ becomes tangible. This means building capacity, more especially of the citizens (human resource) which will enable some of them to get jobs and others to venture into various levels of the diamond value chain. The capacity building should be extended to finance development institutions such as CEDA and indeed the state owned Okavango Diamond Company (ODC).
Moeti Mohwasa – Umbrella for Democratic Change’s Head of Communications
After so much noise and rooftop negotiations, it is now time for Botswana Government and De Beers to share more details on the deal. The Government must share infographics outlining, the number of jobs expected from the additional 5% share of rough diamonds and the associated impact on the GDP, timelines for tapping into the balance of 20% and the expected additional jobs created from the incremental rough diamonds share allocation (up to the ceiling of 50%) and the impact on GDP, total number of jobs expected by year 10 and the projected direct, indirect and induced GDP impact.
It must also give timelines, based on BITC’s investment conversion trends, for mobilising value addition investment including jewellery manufacturing and other downstream activities. As we have always indicated, you cannot make progress unless you set targets for yourself.
Botswana Democratic Party National Youth Executive Committee
The Botswana Democratic Party Youth Wing firmly believes that this groundbreaking agreement will strengthen the existing partnership between the DeBeers Group and the Government of Botswana, and cement Botswana’s position as a global Diamond powerhouse. It is through the steadfast resolve and unrelenting leadership of the President Mokgweetsi Masisi that both entities aligned their aspirations and values, and are now poised to embark on an extraordinary journey of sustainability and shared Success.
This transformative accord reflects the shared vision of the people of Botswana and propels both Botswana and DeBeers forward, ensuring the longevity and growth of their esteemed Debswana joint venture through substantial long-term investments. The new agreement focuses on four key areas of value, each contributing to the mutual success of the diamond industry and the nation as a whole.