from Africa in Transition

De Beers Diamond Moves Sales Army from London to Botswana

October 3, 2014

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For the past century or so, big mining corporations have pursued their operations in Africa, but their senior management, marketing, and sales have been in Europe or North America. That is changing.

The government of Botswana and De Beers Group, the diamond company, agreed in 2011 that the latter would sort, value, and sell diamonds produced by the company Debswana, a joint 50/50 business venture between Botswana and De Beers that accounts for a third of Botswana’s GDP. For its part De Beers agreed to transfer its London based rough diamond sales to Botswana. The move involves the transfer of professionals, equipment and technology from London to Botswana’s capital, Gaborone. In November 2013, De Beers started diamond sales in Gaborone in a state-of-the-art facility. Batswana, nationals of Botswana, are about 50 percent of the de Beers’ employees in the sales division.

The outlook for the diamond industry is good, with new consumers from China, especially.  But few new diamond mines have come on stream over the past decade, raising the possibility of a shortage of supply.  The Botswana-De Beers deal appears to be win/win.  Botswana retains direct access to the world market for its diamonds while De Beers has long-term and uninterrupted access to one of the largest diamond supplies in the world. Over the long term, the De Beers move sets the stage for Botswana to emerge as a major participant in all aspects of the diamond industry, not just diamond mining.  That’s good for the continued development of the country, already one of Africa’s success stories.

More on:

Sub-Saharan Africa

Development

Financial Markets

Economics

Capital Flows

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