How the flawless stone reignited hope

Sedireng Serumula has been hunting for diamonds for the past 8 years. And despite having the privilege of working with the most sought after precious stone for this long he seems not to overcome the exciting feeling of seeing one. “Even for someone who works with diamonds it is always a pleasure to see that kind of a diamond. It strikes you with its beauty,” he explains. Serumula might not have seen the record breaking Botswana-mined diamond that recently sold for what some have termed an “unearthly” auction price, selling for $26.7m (over P200 million. But he says each time he sees such a diamond it brings excitement within him. This was a new world record. Reports state that it took 21 months to polish the stone.

The rare Jwaneng-mined 101-carat diamond was sold at a Christie's auction in Geneva by Harry Winston firm, beating the previous record set by the 76-carat Archduke Joseph diamond, which sold for $21m (£13.8m) in 2012. As Senior Manager, Ore Processing Serumola has seen large stones passing before his eyes. But ironically he did not see the world record beater. This is because Jwaneng mine-which is the recovery plant for all Debswana production-consists of Completely Automated Recovery Plant (CARP) and Fully Integrated Sort House (FISH). As we drive through the dust infested Jwaneng Mine, on a Monday morning Serumula cannot stop talking about mining and diamonds. “We recovered in the past diamonds which are over 400 carats, almost double the size of the one sold in Geneva,” he says as trucks fully loaded with ore pass by to haul at the Ore Processing plants. And possibly another world record breaker will come from what looked like refuse loaded on the P35 million Komatsu trucks. The diamond originally weighing about 236 carats was recovered from Jwaneng Mine production covering the period 21st and 27th June 2007. According to information spruced from the mine officials they have observed over the years that when they mine from certain areas of the pit, they recover large diamonds as big as 300 carats. These are considered as special stones. It is always a beautiful sight, even to the men and women who sort Debswana diamonds on daily basis. As miners blast and drill ore to recover more of these stones mining is also becoming more expensive and complicated.

Naledi Dikgomo-Goulden -Public and Corporate Affairs Manager Debswana - Jwaneng Mine explains: “As the pit gets deeper it becomes more expensive, that is why we bought the 300 tonnes trucks.” Each truck costs close to P35 million.” However for the world’s richest diamond by value they have to dig deeper and initiatives such as the P24 billion Cut 8 are intended to prolong the mine’s lifespan. Dikgomo-Goulden argues that the stone auctioned in Geneva re-affirms the mine’s ranking as the No. 1 producer by value. There is excitement inside the Jwaneng Mine boardroom. And also at Christie’s auction house. “A perfect diamond commands a perfect price: Spectacular 101.73ct D-colour diamond sold in Geneva for a record breaking $26,737,913” reads a Tweet from Christie’s following the sale of the diamond.

The diamond has also raised hopes of diamond explorers. “Of course it encourages exploration,” John Teeling, Chairman of Botswana Diamonds says, adding that when you add the sale of 15 Karowe stones which also were sold for a good price the picture is even better. Experts say the $26.7 m sale can cover six months operating costs in the mine. A view shared by Serumola and Dikgomo-Goulden who says it means more money for Jwaneng Mine and Botswana’s economy. Diamonds have been the mainstay of Botswana’s economy before the recession. Following the recession diamonds exports grinded almost to a halt but the figurers are now promising. Statistics from Bank of Botswana indicate that total diamond exports reached 78.8 percent compared to 76.6 percent reached in 2011. In 2012 diamonds worth P36.1 billion were exported compared to P33.7 billion sold in 2011. Meanwhile, Teeling further stated that the sale price strengthens the place of Botswana at the top of the world’s diamond industry. The latter have been exploring in the country since 2002 and according to Teeling diamond exploration is one of the riskiest ventures in the world.

The odds of a commercial discovery are probably 2500 to 1, he says. So the ordinary people who took out exploration licences will lose all their money, diamond exploration is for the type of investor who realise that they are likely to lose all. Generally the sale of diamonds is shrouded in secrecy. For instance this particular flawless diamond was recovered from production of the week 21st and 27th June 2007. The stone would have reached Diamond Trading Company Botswana (DTC Botswana) shelves the same year for sorting and valuing. The process then entails De Beers’ and government valuators sitting at the negotiating table to agree on the final price. The diamond will then be sold to one of the seven local sightholders. According to DTC Botswana’s spokesperson Kago Mmopi the information about who bought the diamond and for how much is confidential. “There are security issues involved,” he explained. However Mmopi was quick to point out that this particular diamond is an image booster for the industry. Latest price index as published by Polishedprices.com indicates that 1 Carat goes for US$ 149.71 while 0.5 carat is sold for US$142.67. Conversely not all are celebrating. Take for instance Thandi Mashiakgomo-a 48 year-old unemployed Sese resident. She heard on the radio about the sale of the diamond. But to her it does not mean anything. Even the huge figure associated with the sale of the stone does not really add up for her. She lives a miserable life just on the outskirts of Jwaneng town. Having attended school up to Standard 7 Mashiakgomo is subjected to a life of poverty. With minimum education she discarded the idea of looking for a job at the Jwaneng mine. “I hear that they only hire educated people there,” she says. She has been making ends meet by working for Ipelegeng-a government programme aimed at short-term employment-but she left the programme after falling sick. She tried her luck with the social workers to register for welfare but to no avail. As for her partner Tatho Ramahusi he is praying to God to help him attain the age of 65 so that he can get the Old age pension. “I am currently 61 years, and hopefully in four years time I will start to get the pension. Maybe then I will say I have enjoyed money from diamonds,” he said.

This has rekindled the beneficiation debate and an indication that the diamond-rich economy continues to fare poorly in human development. The United Nations Development Programme (UNDP) through its 2013 Human Development Report puts emphasis on command over resources, as measured by income per capita as an essential component of human development. Former University of Botswana lecturer, Prof. Kenneth Good in his report titled: The Social Consequences of Diamonds Dependency in Botswana, faults the country’s failure to diversify as the main root cause of poverty. Though government is steadfast on an equitable distribution of resources there are some who feel that villages, which have natural resources, should not be punished in the name of equitable distribution of resources.

Ruling party Member of Parliament for Ngwaketse West (a constituency, which houses the Jwaneng Mine), Mephato Reatile, argues that the diamond value chain should reflect the clear input of Batswana. According to him it is not surprising that not all Batswana are celebrating the record sale of the Jwaneng-mined diamond in Geneva. “If they had a hand in the process of producing that diamond maybe they will be celebrating by now.” According to the legislator people living in Jwaneng and its surroundings should be the ones providing services at the mine. Not foreign companies. He describes Jwaneng Mine as a rich mine surrounded by poverty and unemployment. This is because Mashiakgomo and Ramahusi are not the only ones struggling to make ends meet but many other people surrounding the mine. If only the $26.7 could help the overcrowding at Sese Primary School this would be something.

The school currently carries close to 744 pupils. “This is the size of a junior school,” Reatile proclaims, adding that the school is running short of classrooms. As for Serumola he cherishes the opportunities brought about by diamond funds. He attributes his stay in Canada in the early 90s studying for Mineral Processing to the fact that Botswana has been able to manage its resources well and sent Batswana for studies locally and abroad. And inside the Jwaneng Mine boardroom new initiatives are being put on the table. Sources have revealed that plans are at an advanced stage for Cut 9-an initiative that will prolong the mine beyond Cut 8. The ongoing Cut 8 project will enable Jwaneng Mine to maintain a minimum output of 10 million tonnes of ore per annum from 2017 to 2024 while Cut 9 will go beyond that. Dikgomo-Goulden confirmed that plans for Cut 9 are at an advanced stage. “The information on the project is still classified it has to be approved by the Board first.” She however noted that the groundwork such as preliminary studies have been done and will be presented to the Board towards the end of this year.

Last modified on Wednesday, 31 July 2013 16:13

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