SPARKLING PARTNERSHIP ENTERS EXCITING NEW ERA

Photo: Former President, Sir Ketumile Masire (left) seems to be happy to re-connect with one of his former ministers, Charles Tibone, now Minister of Minerals, Energy and Water Resources. The ocassion the Signing Ceremony in Gaborone.

The Government of Botswana and De Beers marked 50 years of De Beers’ operations in Botswana at a glittering event in Gaborone on 23 May. The two signed a suite of agreements that cemented one of the most enduring partnerships in the global diamond industry.

The historic signing ceremony took place in the presence of His Excellency President Festus G. Mogae, Botswana’s Minister of Minerals, Energy and Water Resources Charles Tibone, Chairman of De Beers Nicky Oppenheimer and a sea of other dignitaries. The suite of agreements included the renewal of the mining license for Jwaneng mine, the most valuable diamond mine in the world. The license will run for twenty five years effective from 1st August 2004. Additionally the licenses for Orapa, Letlhakane and Damtshaa Mines have also been extended to run until 2029.

An agreement covering the sale of Debswana’s production to the Diamond Trading Company (DTC), the international sales and marketing arm of De Beers, for a further five years was also signed at the event. The DTC is focused upon growing demand for and maximising the value of Botswana’s diamonds while maintaining consumer confidence in the integrity of diamonds.

Another turning point in the history of this unique alliance was the agreement to establish DTC Botswana, a 50/50 partnership between De Beers and the Government of Botswana, which will sort and value all Debswana’s diamond production. DTC Botswana will carry out local sales and marketing activities, working closely with customers to support the establishment of diamond manufacturing operations in Botswana. De Beers will fully fund construction of the new Diamond Trading Company Botswana building in Gaborone at a cost in excess of Pula 400 Million (US $ 83m).

Speaking at the signing ceremony, Minister Tibone said “Diamond mining in Botswana over the past 35 years has fuelled the country’s social and economic development. Botswana has had a worthy and valuable partner in the De Beers Group. We share the mutual commitment to exploit minerals in Botswana in a sustainable, efficient, beneficial and timely manner.

He went on to say: “I am proud to sign these agreements on behalf of the Government and people of Botswana. These agreements will allow us to maximise economic benefit accruing to the country in a way that simultaneously allows the investor to earn a competitive return on their investment. This therefore underlines the essence and importance of the agreements signed here today.”

In response, De Beers Managing Director Gareth Penny said, “De Beers fully supports Botswana’s desire to establish a downstream diamond industry and we are pleased to announce that diamonds will be made available locally for cutting and polishing factories in Botswana. Our target, with Government, is to achieve US $550 million in value of diamonds cut in Botswana by the end of the decade. De Beers will work closely with Government, and together, we will ensure the success of this exciting and ambitious initiative creating the opportunity for further local job creation while maintaining the full value for Botswana’s diamonds.”

De Beers also announced that it had reached agreement, in principle, with the Government of Botswana to bring diamonds from around the world to be “aggregated” by DTC International in Botswana, an activity that was previously carried out in London. This reflects the importance of Botswana as the world’s leading diamond producer and the role of Government in creating businesses in the country.  The development of a local industry has the potential to add real value to the country, upgrading the country’s infrastructure, and serving as a ‘flagship’ catalyst to attract investors to Botswana.

Following the official signing, Chairman of De Beers, Nicky Oppenheimer said “It gives me enormous pleasure to be able to sign these agreements today.  It is only fitting that we do it now in 2006, as it was 50 years ago this year that De Beers geologists took the first steps in their search for diamonds in what was then Bechuanaland.  It is exciting that this agreement not only extends the length of our partnership but also its depth as we move from mining diamonds together to marketing them together in Botswana with the establishment of Diamond Trading Company Botswana.”

Mr Oppenheimer stressed that “Enduring relationships are rare in today’s world.  They are like diamonds, something to be valued and cherished.  At De Beers we are extraordinarily proud to be a part of this special relationship and look forward not only to the next 25 years but 25 years thereafter.”