Diamond major De Beers Group’s Global Sightholder Sales (GSS) division, or international rough diamond sales operations, will continue to deliver direct and indirect benefits for the Botswana economy, De Beers spokesperson Lynette Gould states.

Direct benefits are derived from the value of diamonds traded in Botswana, while indirect benefits include the economic activity in diamond-related activities, such as broking, grading and security in Botswana, as well as benefits derived from support industries, such as catering, entertainment and transport, she adds.

Gould notes that De Beers will publish a report later this year, which will provide data and an analysis of the group’s economic impact in Botswana, including the impact of the relocation of the GSS from London to Gaborone, in Botswana, in 2013.

This relocation resulted in not only the bulk of De Beers’ rough diamonds currently being sold in Botswana but also a variety of world-leading proprietary diamond sorting and valuing technologies having been transferred to a new $35-million facility. These technologies enable efficient sorting of rough diamonds according to size, shape, colour and quality.

“Our research and development division is focused on continuing to make refinements to the entire suite of sorting technologies, and the GSS operation. . . will continue to see the benefits of these refinements this year,” Gould says.

Around $6-billion a year is traded in Botswana at the ten sights, which will create a platform for greater economic activity in the country, Gould reiterates. The rough diamonds are sourced from De Beers mines in Botswana, Namibia, South Africa and Canada.

She further adds that downstream beneficiation in the domestic cutting and polishing sector was catalysed by De Beers’ beneficiation strategy prior to the relocation, pointing out that the sector has supported about 3 500 direct jobs for several years. Half of the staff employed at the De Beers GSS division are Botswana citizens.

“The relocation. . . also played a key role in . . . more diamond-related activities becoming more established in Botswana, including those in diamond broking, grading and security,” Gould says.

The Botswana government has a 15% shareholding in De Beers Société Anonyme, as well as a 50% shareholding with De Beers in Debswana, the joint venture set up to mine Botswana’s diamonds, and in its rough diamond sorting and valuing organisation, DTC Botswana.

Growth Expected
While De Beers believes that the only true source of value for the diamond industry is consumer demand for diamond jewellery, the company remains optimistic of another year of growth at consumer level.

In September 2014, De Beers published its ‘Diamond Insight Report 2014’, which stated that “global diamond jewellery sales reached an estimated high of $79-billion in 2013” and that demand is expected to continue over the long term.

Gould highlights that macroeconomic forecasts in the main consumer markets for diamond jewellery sales predict that global economic growth in 2015 will outpace the rate of growth over the last three years. “Expectations are that the acceleration of 2014 growth in the US will be maintained on the back of a strong recovery across the major areas of domestic demand.”

The recent decline in oil prices is also expected to be an important factor, which should benefit not only the US economy but also the emerging markets, she adds.

Further, the development profile of the consumer landscape in India and China means that there should be direct benefit for the diamond industry, as more consumers enter the middle class, she highlights.

“Therefore, consumer demand for diamonds is expected to perform well in each of the major consumer markets and this should lay the platform for demand for rough diamonds through the year,” Gould concludes.