Thursday, September 27, 2012

Botswana handholds Swazis into diamonds

Botswana has been hailed for its instrumental role in the resuscitation of diamond mining in Swaziland through provision of support for the enactment of key legislation and benchmarking.

Swazi government mining engineer, Sam Ntshalintshali has told Mmegi Business that Botswana played a key role in the formulation of his country's Diamond Act last week and Swaziland's admission into the Kimberley Process Certification Scheme (KPCS), a global initiative to stamp out trade in conflict or illicit diamonds. Membership of the Scheme is a pre-requisite for a country's success in diamond trade as the Kimberley Process represents all diamond producing and consuming countries and civil society monitors. This week, Ntshalintshali led a four-member Swazi government delegation in Gaborone to gather more information on diamond value addition. The visit capped a long bilateral effort starting at ministerial level.
"We consulted with Botswana because we know that this country is one that is moving and developing its mining in a way unlike the rest of Africa where resources are simply shipped out," he said.  "Botswana helped in the drafting of the legislation and policies for diamond mining. We invited Botswana as one of the stakeholders we consulted with in the process of updating our policy framework."
Ntshalintshali explained that until 1997, Swaziland used to have an open cast diamond mine, which closed when its operator found the costs of going underground unviable. The regulatory framework and KPCS membership are designed to pave way for the revival of diamond mining activities.
"We had laws but they became outdated and did not take the prevailing environment and international trends into account," explained the engineer. "We thus had to review these, starting with consultations with the various stakeholders from the public to the industry and others. Botswana came in during these consultations."
Ntshalintshali stated that companies had already expressed interest in mining the waste left behind by the 1997 operations, using improved technology to extract diamonds. He added that the new policy framework would allow for the issuance of prospecting and mining licences in diamonds.
During a meeting between the Swazi delegation and members of the Botswana Diamond Manufacturers Association (BDMA), it emerged that with Botswana's guidance, Swaziland's legislation has been drafted in such a way that diamond production will take place alongside cutting and polishing activities. The legislation covers the percentages of royalties, taxes and shareholding Swaziland will levy and take up in diamond industry entities.
Members of the delegation asked about price discovery in the diamond industry, as Swaziland looks to ensure that its stones are traded at optimal value to the economy."In the diamond industry, market price is not an easy matter to arrive at," responded Steinmetz Botswana managing director, Kfir Teichman.
"You can get a stone, give it to five different professionals and you'll get 20 or 30 percent differences in valuation.Every stone is different and this is not like other commodities where there is a known market price."
Swaziland is hoping the resuscitation of diamond mining will boost its economy by raising export revenues, driving downstream industry and also reducing unemployment.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.