- How important is the diamond to Botswana?
- How important is the diamond to the people of Botswana?
- How did Meghan Markle’s engagement ring influence the diamond market?
- What does the Botswana law say about buying diamonds?
Do you want to buy diamonds from Botswana to ask your girlfriend to marry you? That’s exactly what Prince Harry did for Meghan. It’s a well-documented fact that the African soil is very rich in diamonds. Yet no raw materials were discovered during the British protectorate in Botswana, still called Beetsjoeanaland at the time.
Beetsjoeanaland was granted independence in 1966 and adopted the name Botswana. The first diamonds were found a year later. Even though people didn’t yet know about the riches hidden in the soil, the country is now economically dependent on the diamond mines. Perhaps a little too dependent...
How important is the diamond to Botswana?
Miners in the Karowe mine in Botswana found a rough diamond the size of a tennis ball in November 2015. The biggest rough diamond ever discovered over the past hundred years! The stone was named ‘Lesidi La Rona’, which literally means ‘our light’. This colourless 1109 carat diamond was bought by the British jeweller Laurence Graff for 53 million dollars.
The Karowe mine isn’t even the country’s most important mine. That honour goes to the Jwaneng mine, which produces an average of 10 million carat per year and which can therefore rightfully refer to itself as the richest diamond mine in the world. Debswana, a joint venture between the Botswana government and diamond giant De Beers, announced plans to further develop this mine in April and to extend its life expectancy to 2024.
But according to David Magang, entrepreneur and former minister of Minerals and Water in Botswana, the country has now become too dependent on the diamond. "More than 70% of the government money comes from exporting minerals,” he suggested two years ago during a speech held within the context of the 50th anniversary of his country’s independence.
The country may well be one of the fastest growing economies in the world, but unemployment levels are still high. The Chinese demand for diamonds fell during the past years and this already cost Botswana a significant number of jobs. Despite plans to increase production at the Jwaneng mine, the mines in Botswana are slowly but surely becoming depleted and the country will therefore have to work on economic diversification.
A slowly evolving process ... In view of the difficulties associated with entering new economic markets, macroeconomist Gaotlhobogwe Motlaleng sees the best opportunities in a diversification of the current economic activities. He sees opportunities in cutting and trading diamonds, where Botswana has so far purely focussed on exporting rough diamonds.
How important is the diamond to the people of Botswana?
We already briefly touched on the subject that, even though Botswana is one of the richer African countries, the number of people unemployed is continuing to rise. Botswana also has the highest number of HIV infected residents in the world. The mortality rate due to AIDS naturally affects the inhabitants’ general income.
It is estimated that more than 40% of the Botswana population is infected with the virus. This means that employees have to stop working early or even die prematurely, inevitably resulting in individual families being financially affected. The joint venture Debswana has therefore taken important steps in the fight against HIV and AIDS and even finances 90% of the antiretroviral medicine for its employees and their partners.
And the return of the diamond goes even further. Debswana set up a network of AIDS coordinators and care providers, to raise awareness of AIDS in the workplace. The company also stated it would only do business with partners who could demonstrate to also be working on AIDS prevention in its policy.
The government also feels it’s important for the population to benefit from the rich soil they move around on every day. Once the diamond sector started doing well in Botswana, the decision was made for the proceeds of the diamond sales to be invested in the country’s future. Sustainable projects like education, water facilities and roads were on top of the list of priorities.
So buying diamonds from Botswana means you are contributing to the country’s continued development. The African countries of Namibia, South Africa and Tanzania also use the turnover created from diamond sales responsibly. You can therefore be sure of conflict-free diamonds, which the local population will benefit from either directly or indirectly.
How did Meghan Markle’s engagement ring influence the diamond market?
Prince Harry developed a ring with three diamonds in order to ask his beloved Meghan to marry him: two round diamonds from his deceased mother Diana’s personal jewellery collection and a cushion cut diamond from Botswana. What few people know is that Harry actually travelled to the heart of the diamond sector to personally select the diamond.
His ring design confirms the global recognition for Botswana as a producer of beautiful and conflict-free diamonds. Experts estimate the Botswana diamond on Meghan’s finger to be 5 carat. The entire ring is thought to be worth around 350,000 dollars. But this royal recognition is absolutely priceless to Botswana.
“Choosing a diamond from Botswana shows the social and ecological responsibility which Prince Harry and Meghan displayed, considering diamond mining in Botswana contributed to the country’s transformation into one of Africa’s most prosperous economies”, according to Kathryn Money, Brilliant Earth’s Strategy and Merchandising Vice President.
We can quite happily refer to this as the ‘Markle effect’, but many millennials want to buy an engagement ring with conflict-free diamonds. Sustainability and ethical production have always been important to generation Y. The online search traffic for synthetic diamonds also increased from 36% to 100% over the last decade.
“Synthetic diamonds, made in the laboratory, are not just 20% cheaper than the natural product, but are also not confronted with a number of ethical problems which plague the traditional producers,” according to the news site The Hustle.
Yet research shows the consumer will continue to opt for the authentic product. After all, buying natural diamonds means opting for authenticity and rarity. And whoever is socially committed, like Harry and Meghan, will prefer diamonds which the local population can benefit from. Those wishing to buy diamonds for investment purposes will be able to benefit financially when opting for a natural diamond too.
What does the Botswana law say about buying diamonds?
Reuters, the news service with more than 2500 journalists in almost 200 countries and also an international supplier of financial data, reported on the fact that Botswana would be changing its diamond trading law a few months ago. The government will now be given first refusal to buy diamonds which are ‘unusually large, or have other special characteristics’.
The term ‘unusual’ wasn’t specified in any more detail in the legal proposal. An official told the local paper that this concerns stones which are unusually large, particularly clear, or those with an unusual colour. However, it does say that whoever is in possession of such a stone, must notify the minister within 30 days.
"The price the government will have to pay for a rough or unprocessed gemstone made available for sale by the producer will be agreed between the parties in accordance with the rough or uncut gemstone’s current market price,” according to Botswana law.
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