HomeNewsBots economy to sparkle after diamond deal

Bots economy to sparkle after diamond deal

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Deep inside Jwaneng, the world’s richest diamond mine in southern Botswana, Tshepo Kgomokhumo drives his massive truck through piles of rocks forming a lunar-like landscape.

His job is to ferry away tonne after tonne of unwanted rocks while a small army of bulldozers near him tears into the earth’s crust in search of the precious stones.

“I’m a soldier for my country,” Kgomokhumo says. For him, as well as many others in this small, arid country, diamonds are a source of both income and pride.
The economy of Botswana, a landlocked country in Southern Africa, has been transformed by diamonds. Since their discovery in late 1960s, the development of the country has been built on the gems buried deep in its soil. In 1969, the Botswana government signed a 50/50 deal with global diamond giant De Beers to explore and mine all of the country’s diamonds. The partnership, called “Debswana,” has helped turn Botswana into one of Africa’s most prosperous countries, boasting today a robust economy and one of the highest per capita incomes on the continent.
The state mines the country’s riches as an owner, getting a share of the profit in addition to just collecting taxes and royalties like many other mineral-rich African governments.
This unique arrangement has allowed Botswana to make significant investments in education and health care, officials say.
“Since we partnered with De Beers, we have a lot to show from any community development standpoint,” says Bank of Botswana governor Linah Mohohlo. She notes that this model can be emulated in other parts of the continent.
“If you were to replicate what we do in Botswana in other African countries, I have no doubt in my mind that there could be meaningful gains.”
And now, Botswana’s diamond industry looks set to get a further boost after De Beers announced last year its decision to shift its rough diamond trading operation from London to Gaborone, the Botswana capital.
The company says it expects the move to bring an extra $6 billion of diamond sales into the country. A new head office is also under construction while 80 staff members would be relocated from Europe to Africa.
Kago Mmopi, of the Diamond Trading Corporation, says the sales agreement would set up Botswana as one of the world’s key diamond centres.
“These diamonds are basically your top-of-the-range kind of diamonds,” he says. “These are gem diamonds. They will certainly go for jewelry.”
Those close to the deal say the impact of the De Beers move will be felt in many other ways too. Some international banks, which finance the diamond industry, have applied for banking licences, says the government. — CNN.

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