Bots eyes Chinese diamond market
Botswana’s diamond giant Debswana has said the local sector will do well to leverage on growing demand for gem quality and industrial stones in China’s booming market.
Speaking on the sidelines of the Botswana Chamber of Mines AGM in Francistown recently, Esther Kanaimba-Senai (Debswana group manager for public and corporate affairs) said China was presently one of the bright spots in the global economy.
Botswana is the world’s biggest diamond producer by value, with diamond export accounting for about 70 percent of its foreign currency earnings and nearly 50 percent of revenue.
Debswana is a 50-50 joint venture between the Botswan a government and De Beers, though the latter is understood to be on the verge of selling its stake to Anglo American.
Senai said China’s tariff reduction and exemptions would enhance exports from Botswana.
“It is a big chance for the diamond industry in the country especially when the recent agreement between Botswana and De Beers provides for an independent sales outlet for Botswana, which will begin at 10 percent of Debswana’s run of mine production and rise to 15 percent over a five year period,” she said.
At this year’s G-20 Summit in France and the Asia-Pacific Economic Co-operation (APEC) meeting in the United States, China’s President Hu Jintao announced give duty-free status to 97 percent of the exports to China from least developed countries with diplomatic ties with Beijing.
Since 2001, Chinese money coming into Africa has risen from US$50 million to nearly US$1 billion annually.
By 2008 investments in Africa had topped US$26b , with 1 600 Chinese enterprises focusing on mining, agriculture, manufacturing, communication, energy and infrastructure.
Sudan, Algeria, Nigeria, South Africa and Zambia are the main investment destinations.
In 2009, China overtook Japan to become the second-largest consumer of diamonds after the US.
Debswana’s Senai said an expanding upper-middle-class in China would spend about six times as much their counterparts in the West on luxury goods.
“After an unprecedented period of growth in the price of both rough and polished diamonds during the first half of 2011, prices have largely plateaued with a softening seen in some categories,” she said.
Following months of growing diamond exports, Botswana’s leading economic driver registered a sudden fall in September 2011.
Diamond exports totaled US$166.8m, dropping 32.6 percent year-on-year, and 68.5 percent month-on-month.
The figures for exports of rough and polished diamonds were the lowest since December 2010, based on recently published statistics from the Bank of Botswana.
Exports peaked in June when they rose to US$670.8m.
In the first nine months of 2011, Botswana exported US$3.7b worth of diamonds.