Expert calls for DTC Botswana competitiveness

STRYKER MOTLALOSO
Staff Writer | Friday April 13, 2007 00:00

 

The Israel-based expert, Chaim Even-Zohar, said in an e-mail interview that such demands would not constitute the violation of any agreement between Botswana and De Beers.

 

'The people of Botswana, however, must understand that the factories in Botswana will be competing with factories in South Africa and Namibia. The governments in these countries also want beneficiation', he warned.

To address the likely threat to be occasioned by both the South African and Namibian governments to Botswana, Even-Zohar said that it is important for conditions in Botswana to remain competitive and that such is the role the Government of Botswana will have to assume.

 

The Israeli expert argues that competitive conditions were the reason some South African diamond manufacturers were already opening up factories in Botswana and that if labour costs rose too high, these manufacturers would not stay.

He dismissed the likelihood of DTC Namibia impacting on Botswana: 'I do not see Namibia impacting on Botswana,' he said. 'Namibia's production is small (some 700 million US dollars a year), and De Beers is committed to selling 10 percent domestically.

'DTC Namibia will only sell to local manufacturers. They may at some point do sorting,' he added.

 

But even if Botswana's western neighbour went into sorting, this country would still be cushioned from any considerable impact by site aggregation - the mixing of diamonds in saleable boxes - which is to be done in Botswana by and for DTC International, Even-Zohar argued.

He emphasised that the main point of DTC Botswana and De Beers' arrangement was that it is a 50-50 sharing of responsibility and decision-making, especially regarding how many diamonds to sell to each factory and under what terms and conditions:

 

'There was never any domestic discretion on these issues. This is a step forward,' he noted. Even- Zohar's view tallies with that of De Beers Botswana Chief Executive Officer Sheila Khama's. She said recently that the May 2006 agreement between De Beers and the Botswana Government and the January 2007 one between De Beers and the Government of Namibia were mutually beneficial arrangements.

 

Khama also said the Namibian government had fully endorsed the concept of aggregating regional production in Botswana, while the Government of Botswana fully recognised the right of Namibia to cut and polish a portion of Namibian diamonds locally.