Three more diamond cutters, polishers come to town

The Government has revealed three more diamond cutting and polishing companies will set up businesses locally before the end of this year to increase the number of local factories to 34. This was said by the Minister of Minerals and Energy Lefoko Moagi this week in Parliament.

Moagi highlighted that there has been an increase of companies applying for licenses to venture into the cutting and polishing of local diamonds, adding that six companies were issued with licenses last year.

“Through an arrangement between the Government, Debswana, DTCB and De Beers global cyto sales, a minimum of 800 million US dollar worth of Botswana rough diamonds is made available annually for cutting and polishing in the country.”

“Through this arrangement, in the last seven years, an average of 18% of Botswana diamonds by value were made available for cutting and polishing in Botswana,” he said.

Moagi further stated that over the seven years, an average of 2 149 people were employed in the country’s cutting and polishing industry, at which time there was a total of 25 companies.

“Since 2021, there has been a spike in the number of companies applying for licenses to set up in the country. We now have 31 operating factories employing 3 100 people with three additional factories still setting up to be operational by Q3 2022.”

“Indications are that this year about 950 million US dollar worth of rough diamonds will be supplied for cutting and polishing in Botswana,” added Moagi.

Moagi also said the cutting and polishing industry is a highly specialised business which requires specialised knowledge, skills and funding.

“Given the specialised nature of the business, including it being both cash and dollar based, the industry requires significantly higher investment capital than most businesses.”

“There are very few institutions willing to finance this industry, hence only companies with strong balance sheets partake in it. In fact, in Botswana, the bulk if not all of the funding for a cutting and polishing business is from banks outside the country,” said Moagi.

He said the Government, through the Okavango Diamond Trading Company, is finalising ways of introducing contract sales alongside the current option sale that will target citizens who are in the cutting and polishing , jewellery and manufacturing space to access the goods and, therefore, partake in the business. Moagi further stated that discussions are ongoing through the Ministry of Finance of help Batswana in gaining access to funding from local banking institutions.

“We also have investors in this industry who are also willing to open a diamond bank so they can help those in the same cutting and polishing industry. So, if they meet all the requirements stipulated by Bank of Botswana, then we will have such an arrangement soon,” stated Moagi.

Moagi also highlighted that they recently courted some foreign companies who promised to transport their machinery into the country this September to kick start the cutting, polishing and jewellery business.

“Some of these companies have already recruited some of our University students to train them so that when the business starts they’ll have knowledge in terms of what they want.”

“We are also looking at experts coming on board to train our citizens about diamond cutting and polishing,” said Moagi.

He said it is the Government intends to encourage more Batswana to take up opportunities within the sector.

Source: https://www.sundaystandard.info/three-more-diamond-cutters-polishers-come-to-town/