Diamond tender facility takes shape
Diamond tender facility takes shape
Spadework has begun on construction of a trading facility at Diamond Technology Park (DTP) in Gaborone, marking the first stage of what will become a platform for independent tenders for local, regional and international diamond producers and buyers trading in Botswana.
A groundbreaking ceremony was held at the park last week on the tender house that is expected to be operational by the first half of next year.
Infrastructure at the three-storey turnkey project that is being built on 1,410 square metres will include sorting rooms, viewing rooms, management offices, a laboratory, a control room, a café, technology hardware, diamond equipment and internal security systems that include CCTV and access control. Says Rutang Moses, the Chief Executive Officer of DTP:
"Establishment of the trading facility marks the next step towards Botswana becoming an international trading centre for rough and polished diamonds. DTP anticipates this project will encourage diamond producers to sell their production in Botswana, offering diamonds to the newly established cutting industry, thereby underpinning viability of the trading facility."
DTP is a private initiative funded by Safdico, a Diamond Trading Company Botswana sightholder with offices and facilities in Gaborone, Antwerp, Geneva, Johannesburg, London, New York, Tel Aviv and Mauritius. Designed by a DTP architect after visiting tender houses in South Africa, Antwerp and Tel Aviv and researching what would be optimal, the Gaborone facility is to be the most state-of-the-art such facility in the world.
However, before Botswana can succeed in bringing regional and international producers to trade their production in Gaborone, the new tender house is likely to be the platform for the trading of rough production to be unlocked from the acquisition of an independent marketing window that government is currently negotiating for with De Beers.
Botswana produces diamonds worth approximately US$3 billion (P19.8bn) on average, with all the production sold through the DTC framework.
However, in the past few years, government has openly expressed its wish to sell part of the Debswana production through an independent window and made this a key part of negotiations of a new marketing agreement that should be announced soon.
Although the negotiations between Botswana and De Beers are eight months overdue, Mmegi understands that government has successfully negotiated a 10-year deal with an independent 10-percent marketing window that will increase to 20 percent over the lifespan of the new contract.
It is estimated the window will unlock rough trading of between $300 and $400 million on average, giving government flexibility through pricing and distribution policies to ensure success of the country's beneficiation aspirations.
At present, the existing 16 diamond polishing cutting factories (which are to be increased to 20) need about $800 million worth of supplies annually. When the window opens, Botswana will process about $1.2 billion locally. As part of efforts to turn Gaborone into a world recognised diamond centre, the government has also given the green light to Firestone and Lucara to sell part of their production from BK11 and AK6 mines by open tender. Firestone has held four tenders since December last year.
Breaking the ground for the new diamond trading facility, Diamond Hub Coordinator, Jacob Thamage, commented: "I'm extremely excited by the start of the development of Phase Two of the DTP. It couldn't have come at a better time."