ODC debuts diamond sales to citizens
Mbongeni Mguni | Tuesday September 19, 2023 06:00
ODC conducts 10 auctions of rough diamonds each year, attended by buyers from across the world who bid on an auction basis for the different sizes and types of stones on offer.
The company sources its diamonds from an annual 25% allocation of Debswana’s production, a figure expected to rise to 30% this year when the new deal between the government and De Beers kicks in. The ODC sells its stones on a spot auction basis, where buyers registered on its books bid for parcels on a competitive basis.
At each auction, citizens and citizen-owned enterprises have generally failed to progress beyond the first two rounds of bidding for any parcel, as the wealthier and more experienced international buyers have dominated the sales over the years. On Friday, ODC managing director, Mmetla Masire, said beginning in October, a portion of the company’s diamonds would be reserved for citizen allocation. The sales will be conducted on a tender auction basis, rather than the open auction, which means even when only one firm bids for a certain parcel, they can be awarded the stones.
“We have listened to you, engaged with you and seen the results of the survey we distributed through you and today, we have put something together for you,” he told citizen diamond firms in a briefing. “We have looked at the sizes of lots, range of goods and we have also looked at the competitive pricing that is a challenge when you are put in the same room as the international players. “We believe with this model, the only challenge will be the cook, because the ingredients will now be in place.
“Whether the meal is tasty is up to you; that’s the only risk left and that’s for all of us because we all form part of the ingredients going into the pot.” Known as the 3p3e, the exclusive citizen sales will ensure that portions or packages, presentation and pricing are all appropriate, while deliverables will include enterprise development, empowerment and employment creation.
“There’s about three weeks left before the next sale and we need to prepare for that,” Masire said. “There’s time to finalise your registrations.” Rough diamonds to be offered exclusively for Batswana will have a specific range in carats but cut across the types generally offered by ODC. Specific details on the carats and types to be offered will be firmed up closer to the auction as the ODC awaits the coming into effect of the De Beers and government agreement. Speaking at the briefing, citizen diamond stakeholders welcomed the new allocation, but queried why the ODC was not rather offering them contract sales as opposed to competitive bidding via the auction system.
According to the ODC’s survey results, nearly 59% of citizen respondents said they would prefer contract sales as a method of securing rough supply from the ODC, compared to just 10.3% who preferred auction sales. Just over 31% said they would prefer a combination of both. Masire said the contract method would pose its own challenges to both the ODC and citizen enterprises. “We are very consistent and we operate on an auction basis, from which we are not deviating. “We have been selling for 10 years to international players and not a single sale has been on contract.
“The international buyers can argue for that and we can come up with a way of dealing with that because we have a record of dealing with them over the years and we know who pays and who does not. “We are just meeting with you right now and you are asking us to get into a marriage without a prenuptial agreement. “But even on our books, we don’t have enough supply to support all of you on contract. “We have to really build the relationship first and perhaps you would rather ask that instead of waiting for 10 years, let’s consider this sooner,” he said.