By Mpho Tebele
Gaborone-Botswana is working on amending some of its laws that would give government first priority to buy big diamonds mined in the country.
The revelation comes on the heels of reports that a diamond that was discovered two years ago dubbed Lesedi la Rona by Canadian miner Lucara Diamond weighing 1,109 carats is still to be sold after an attempt to auction it failed to attract a price the producer expected.
Lucara also unearthed another 812.77 carat stone, The Constellation, at the same mine, which fetched $63 million at an auction in 2016.
A gazetted draft Bill for amending the Precious and Semi-Precious Stones Act contains a new clause that compels any producer that comes into possession of an unusual rough or uncut diamond to notify the government within 30 days following which government shall have the right of first refusal to the stone.
The Bill states that the price to be paid by government for a rough or uncut precious stone offered for sale by the producer shall be agreed between the parties in accordance with the current market price of the rough or uncut precious stone.
Chief minerals officer in the Ministry of Mineral Resources, Green Technology and Energy Security, Moses Tshetlhane has confirmed that the recovery of one or two unusually big size diamonds in the category of the Lesedi La Rona in the past by local diamond mines necessitated the amendment of mining laws.
“These outliers carry special features and any producer would celebrate such or even have them in museums as national treasures. So it is not unusual for governments to have options in such unusual diamonds,” Tshetlhane said.
He said every diamond mine has a production profile that when drilled down further into details yields a production fingerprint adding that in that profile or fingerprint, an unusual diamond would have certain characteristics in terms of size, quality and colour.
Some of the amendments to the Act include stiffer penalties for illegal trade of diamonds, as well as false declarations of discovery of precious stones.
The amended law attracts a fine of as much as P500,000 and P2 million for a repeat offender to a person who imports or exports a rough or uncut diamond without inspection from an authorised person.
According to the Bill, producers that also make false declaration about the place they would have discovered a precious stone should also be liable to penalties prescribed by law for a crime of perjury, and all rights acquired by them in consequence of any such declaration shall lapse.
“Some of the key changes to the Act are to remove trade barriers and increase penalties to deter any potential illegal trade as well as improve facilitation in the sorting, valuing, aggregation and selling of rough diamonds,” Tshetlhane was quoted as saying by a local publication, Mmegi.
He reportedly revealed that The Precious and Semi-Precious Stones Act is being amended to ensure that it stays relevant and applicable to the prevailing and ever changing environment in the diamond industry.
The government is also amending the Diamond Cutting Act in a bid to ensure the law stays relevant as industry continues to evolve, particularly in recognition of the fact that Botswana seeks to be a world-class diamond centre. Amongst some of the changes include amendments to the licensing requirements allowing 18-year-olds to be legible compared to the initial 21-year-old criteria.
The changes also remove the requirement of a nominee of the applicant from holding a diamond cutters licence on behalf of the company.
“Companies have raised concerns regarding the current practice of issuing a licence to a nominee of a company as it creates an administrative burden for the Ministry when companies are required to apply for an amendment of the licence whenever a nominee leaves a company.” Tshetlhane was further quoted as saying.
Penalties for contravening provisions of the Diamond Cutting Act have also been revised upwards to match the magnitude of the offences including indexing the fines to the value of the diamonds.
Some of the penalties have been increased from P500 to P500,000 while others have been reviewed upwards from P2,000 to P2 million.
Diamonds have been Botswana’s biggest revenue earner since the country gained independence in 1966. The country is home to one of the richest diamond mines by value known as Jwaneng diamond mine owned by Debswana Diamond Company (a 50/50 joint venture between De Beers and Botswana Government.