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Botswana – South Africa: The secret behind their ‘diamond wedding’

By Christophe Le Bec
Posted on Thursday, 22 July 2021 09:35

A sightholder evaluates a selection of rough stones. Ensuring that they are accurately valued is extremely important to this state, as the diamond industry accounts for more than 40% of its GDP © Chris Ratcliffe/Bloomberg via Getty Images

Botswana, where four of the world’s richest deposits are located, was producing around 24.2m carats of diamonds until 2019, thus making Gaborone the second-largest producer globally, behind Russia. No less than 65% of the supply from De Beers (the country’s preferred partner ever since it gained independence in 1966) is extracted from the country’s diamond mines.

The group, which was established in South Africa and is a subsidiary of Anglo American, has a 50% shareholding with the state in two companies: Debswana, which is responsible for operating the four mines, and Diamond Trading Company Botswana (DTCB), which was founded to value the diamonds.

Ensuring that its diamonds are correctly valued is extremely important to this semi-desert Southern African country with a population of only 2.3 million, as this industry accounts for more than 40% of the country’s GDP.

Partnership with De Beers

In 2006, Botswana decided to build its own diamond sorting centre to increase local value-added. Located near Gaborone airport in a highly secure DTCB building, more than 230 sorters – all Botswana nationals – classify the gems into one of 250 categories of rough diamonds that De Beers established based on the ‘4 Cs’: carat [size], clarity, colour and cut. All of the employees have attended the Diamond Academy, a six-month in-house training course held on-site.

In 2011, the joint venture between De Beers and the government moved to the second stage of its local beneficiary programme, which is focused on marketing the diamonds. Since then, the rough stones that leave the sorting centre are no longer shipped to London.

Instead, they remain in Gaborone where they are cut and then sold. These two stages are closely supervised by 92 local sightholders (in charge of evaluating the stones’ commercial potential), who have been trained for five to 10 years by their British predecessors who used to work in London.

Gaborone, the diamond capital

Each sightholder specialises in a market segment that is defined by the company’s classification system, which includes 11,000 sub-categories. These range from cut diamonds that are intended for industry – and which are sold at around $0.30 per carat – to the most beautiful, large and rare coloured stones used by high-end jewellers, which can fetch up to $1m per carat.

From now on, sorted diamonds from Botswana mines – that are managed by De Beers – as well as those from Namibia, South Africa and Canada, will arrive by plane in Gaborone and be marketed from there.

The country’s authorities, who were anxious to move up the value chain and promote local employment, however encouraged sightholders to settle in Botswana and this allowed De Beers to resolve its economic, logistical and security concerns.

All in all, it made sense to choose Botswana – which is responsible for two-thirds of the production – as the country to collect the stones, as this will mean fewer trips for the diamonds, which means lower costs and a reduced risk of loss and theft.

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