Botswana’s Okavango Diamond Company is set to convene its pilot sale of rough diamonds next month.
Rapaport recently quoted Okavango chairperson Jacob Thamage as saying that 50 companies would be invited to view the goods in Gaborone before taking part in the live auction test.
The sale, which would be conducted on June 26, was intended to test the company’s systems before it launches full, regular auctions in September.
The State-owned diamond trading company managing director Toby Frears said the sale was one last step before Botswana records another milestone for its diamond industry.
“It will help us ensure that our systems are efficient and robust ahead of our full sales launch and underlines our commitment to delivering a customer focused sales model,” he said.
Botswana and De Beers signed a new 10-year sales agreement in September 2011.
The agreement, backdated to January 1 2011 paved way for the diamond giant to transfer its rough diamond sales activity to Gaborone, ending a 100 year tradition of sending African gems to London.
The Diamond Trading Company (DTC)’s relocation of its sights and sales operations - including professionals, skills, equipment and technology - from London to Gaborone was expected by end of 2013.
However, it had since started to aggregate (in Gaborone) production from De Beers’ mines including South Africa, Namibia and Canada.
This commenced last August, two months ahead of schedule, ending 80 years of aggregation in London.
The agreement also provided for the setting up of an independent sales outlet for the Botswana Government, which was meant to begin in 2011 at 10 percent of Debswana’s run of mine production and rise to 15 percent over a five year period.
“The transformation that this agreement sets out is testament to our belief in the future of Botswana, and is a clear acknowledgment that De Beers’ success is only possible with a profound understanding that the aspirations of our partners must be at the core of our business,” said then De Beers chairperson Nicky Oppenheimer.
“Botswana has preserved and enhanced a highly successful route to market, focused on maximising the value of her natural resource, and De Beers has secured long-term and uninterrupted access to the largest supply of diamonds in the world.”
Without wasting much time Botswana established the Okavango Diamond Company in March 2012.
Although the Botswana government confirmed to Rough & Polished last June that it had not yet acquired its share from Debswana, there was no doubt that it had started to exercise that right this year, hence the pilot sale next month.
Okavango was this year entitled to 12 percent of Debswana’s annual output.
Debswana produced 20.2 million carats in 2012, down 2.7 million carats from the previous year.
The move was also expected to shore up the country’s economy, which however has come under heavy criticism for over reliance on diamonds.
Figures recently released by Statistics Botswana earlier in the year showed that the economy only managed a 3.7 percent growth last year.
The decline in pace of growth in real GDP was due to the mining sector which recorded a decrease in value added of 8.1 percent in the year.
Diamonds dominate the country’s mining revenue.
However, IMF recently said that Botswana’s economic growth was projected to reach 5.5 percent in 2013.
The generally strong performance would be based on ongoing investment in infrastructure and productive capacity, continuing robust consumption, and the activation of new capacity in extractive sectors.
Whatever economic projections being floated around, Botswana was upbeat that the local diamond sales would boost their fortunes and were also a part fulfillment of their quest to maximise benefits from locally produced minerals.
To them, the local diamond sales were a major breakthrough and indeed positive gains should be realised to avoid any disillusionment for expectations have reached a crescendo.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
