Magang decries distressed diamond polishing industry
Isaac Pinielo | Friday September 2, 2016 14:59
Speaking at a Botswana Institute of Chartered Accountants (BICA) gala dinner recently, Magang said the industry is experiencing problems that include the cost of production relative to places such as India and China.
“I am told that whilst it costs between $60 (P647.85) and $65 (P701.83) to polish one carat of diamond in Botswana, in India it costs between $12 (P129.60) to $25 (P269.94) and in China it costs between $20 (P215.95) to $30 (P323.92). Also, our productivity levels constitute an own goal,” Magang said.
He also indicated that wage levels in the industry are roughly the same as those obtaining in India, noting however that an Indian would cut two to three diamonds in the same time span it takes a Motswana to cut one diamond.
He further lambasted the Botswana National Productivity Centre (BNPC) stating that its establishment had not yielded any fruit in this regard.
“If the truth may be told, the institution is little more than a white elephant,” Magang said.
The former minister said the 22 cutting and polishing factories that have been set up in the country to date have not done badly, adding that they created just under 4,000 jobs, notwithstanding the lay-offs that have arisen in the face of a worldwide slump in the demand for diamonds.
In 2013, he noted, $6.6 billion (P71.3bn) worth of diamonds were exported, making the industry the largest manufacturing exporter in the country.
“Yet the industry is not without what I could refer to as teething problems,” he said.
Meanwhile, Magang decried the advent of synthetic diamonds, saying they now make for roaring business. According to Magang, their market value amounts to $9 billion (P97.2bn) a year. He said the fact that De Beers is about to enter the synthetics market too, to peg its claim on the flourishing market, poses one of the greatest threats to Botswana’s economic well-being. “The ramifications are that even if our mines were to continue to be operational for the next 100 years, no one would buy our diamonds if synthetics became fashionable,” he stated.