HB Antwerp unsolicited proposal irks parley
Lewanika Timothy | Monday July 10, 2023 06:00
That was after Minister of Minerals and Energy, Lefoko Moagi revealed that government accepted HB Antwerp unsolicited proposal among a number of interested companies.
The deal had never been discussed in Parliament before. The matter arose when Maun West legislator, Dumelang Saleshando asked Moagi among others to state the process that was engaged to identify HB Antwerp as a partner for the Botswana Government and how the process accorded other players the same opportunity to be considered.
In response Moagi, revealed that HB Antwerp together with Lucara Diamonds Corporation initiated this unsolicited proposal in 2019 and that other players have had similarly unsolicited proposal reviewed by the Government of Botswana. “Government evaluates each unsolicited proposal on the basis of the proposers’ furtherance of Government stated economic development objectives. The value proposition by HB Antwerp has been assessed to be robust as it addresses the right strategic and commercial decisions for the government of Botswana to diversify into an alternative eco-system to realise full value for its diamonds. The aspirations include development of value chains in the mineral sector as stated in the Reset and Reclaim Agenda Priority No. 4,” Moagi told Parliament. But the issue of unsolicited proposal irked Members of Parliament (MPs) among them Francistown South legislator, Wynter Mmolotsi who wanted to know why the proposal was not open to everyone or company as it is often done by government. “Why didn’t you allow anyone who believes they can play in that space to tender in that kind of bid?” he further questioned. For his part Bobonong legislator Taolo Lucas asked if there were other companies that submitted unsolicited proposals like HB Antwerp.
Lucas said since he was suspicious of the deal he requested the minister to list three companies that submitted proposals almost similar to that of HB Antwerp and what were their flaws.
For his part, Sefhare Ramokgonami legislator, Dr Kesetegile Gobotswang said since transparency is one the government pillars, why the HB Antwerp deal was not done in the glaring view of the public instead of secret deals. He said this brings suspicions. In response, Moagi failed to provide the exact names of other bidders saying that he would have to go and consult, an answer that caused rumbles and mumbles among legislators. He explained that other companies’ proposals just like HB Antwerp went through proper evaluation and it was then decided that the HB Antwerp proposal is innovative and can provide a significant positive impact for Botswana.
“No law was broken. Unsolicited proposals are allowed, they are evaluated,”he highlighted. The HB Antwerp deal debate in Parliament comes at a time when many people had been kept at the edge of their seats as the diamond industry received a pump of attention as government and De beers re negotiated working terms. Antwerp is a three-year old Belgian firm that specialises in applying high technology such as robotics to processing diamonds all through the value chain.
The Belgian firm despite being babe in Botswana terrains, has attracted a lot of favour and seems to be in governments good books as the duo has in a short period of time chartered an investment relationship that includes an imminent 24% stake purchase in Antwerp by government. HB Antwerp appeared on Botswana’s horizons first via a six-month deal with Lucara in 2020, which was later extended to a 24 months deal that would expire in December 2022.
The two partners have since signed a 10-year deal to 2032, under which all +10.8 carat diamonds from the Karowe mine, which have historically accounted for approximately 60% to 70% of Lucara’s annual revenues, are sold to HB Antwerp at prices based on the estimated polished outcome of each diamond. Time would reveal that Antwerp came to Botswana with a greater mission as news of plans intentions to purchase a 24% stake in Antwerp reached the public domain.
This would signal a strong desire by government to forge a long partnership with the Belgian enterprise. Meanwhile, President Mokgweetsi Masisi who has been at the forefront of advocating for gaining greater value from Botswana’s diamonds, would in April during a BDP presser reveal that though eyebrows have been raised on the relation between government and newbie Antwerp, the relationship represented greater efforts to allow Botswana to enjoy more benefits in the diamond value chain.
Masisi went on to further dismiss concerns over the infancy of the company saying that it is backed up by invaluable years of experience in the mining industry garnered over time. “We are all saying it’s a young company, it’s only two years old, so what? When you look behind what makes that company, there are generations, loads of years of experience.
The totality of the years of experience exceeds 100” Masisi said. The President further went on to reveal that the imminent partnership between the duo followed a rigorous process of due diligence. He said that the company has in a short period of time proved itself to be a partner of choice given its success with Lucara.
“We did the due diligence very, very thoroughly for HB Antwerp and it wasn’t done quickly.
This is a project that took years, a number of years to do. And we had to ensure as part of the due diligence that there was a proof of concept using someone else or some other entity as the one taking the risk, not Botswana government money” he said. Despite a detailed background on Antwerp by Masisi the real worry remained unabated, which was whether the government followed transparent channels to select Antwerp as a partner of choice in diamond value beneficiation. The worry continued to linger in the minds of many till Saleshando Moagi in parliament this week.