The Projects | Diamond sales & marketing
Okavango Diamond Company (ODC) , the state-owned rough diamond marketing and selling company is optimistic the magnificent Okavango Blue, a rare diamond recovered from Debswana Orapa Mine in 2018 will find a new home this year.
Speaking to The Projects Magazine on the side-lines of Mining Indaba in Cape Town early February, ODC Managing Director Mr Mmetla Masire said the spectacular 20+ carats blue diamond has not been able to find a buyer because they have not found the right time to sell.
“We displayed it in New York last year to market it to the world post COVID-19. The intention was to auction at end of last year, however, if you look at some of the market trends of late 2022 they yielded a low demand, so we took a decision that the timing was not right,” Masire said.
“We are looking forward to 2023 and we are hopeful we should have found the right slot to yield optimal returns for it before end of 2023″ he said.
Masire said this is a blue stone that follows different dynamics. “That’s the only reason we are holding back. This year we will decide which selling method will be best suitable for this diamond, we are hoping that before end of 2023 we should be able to sell the Okavango Blue”.
The Okavango Blue is a 20.46 carat blue diamond of exceptional clarity. The Okavango Blue originated from the Orapa diamond mine in Botswana. The original stone was found in May 2018, weighing 41.11 carat, and was cut in an oval shape.
FINANCING CHALLENGES FOR CITIZEN DIAMOND COMPANIES
With regard to low participation of citizen companies in the buying and selling of rough, Okavango Diamond Chief said access to financing is the single most major impediment for citizen owned diamond trading companies, stalling national beneficiation efforts of having Batswana significantly participate in lucrative economic sectors such as the diamond industry.
Masire said this emerged at the citizen companies breakfast session organised by ODC late December 2022, which was aimed at engaging all citizen owned diamond companies on industry matters to exchange ideas and forge collaborations on how Batswana can actively participate in the buying and selling of diamonds as well cutting and polishing.
Mmetla Masire said over the 10-year existence of ODC there has been very low participation of citizen owned companies to an extent that even some of those that are registered as ODC customers are not buying or trading in any goods.
“To raise money to buy diamonds is very tricky because of the nature of the diamond market where the value fluctuates, so this is the risk that commercial banks are not willing to take, in diamond hubs such as Antwerp in Belgium, Suret India the risk is taken up by a government owned bank”
Quizzed on whether Botswana has a business case to establish a development bank focused on the diamond sector Mmetla Masire said Botswana is a world leader in diamond production “We have got a very strong business case, we are the largest diamond producer by value, so we have a very strong case and we have very eager citizens willing to participate in this sector” he said
Batswana companies have also called on government to intervene with bespoke financing programs tailored specifically to support citizen companies and capacitate them to compete with big multinationals and global industry players.
During the workshop representatives from the banking sector highlighted that there is need for collaborative efforts in terms of creating programs that can back up financing institutions and absorb the risk of funding citizen companies, such as credit guarantee schemes designed specifically for citizen diamond trading companies.
Suggestions were also around the need for structural reforms that can de-risk the industry and motivate for other financing options such as those from pension funds who continue to be invested outside the country in bigger percentages.
On the expansion of Okavango Diamond, Mmetla Masire revealed that the new ODC building is nearing completion which will allow the company to spread its wings and scout for business outside Debswana production.
Okavango Diamond Company is a rough trading company wholly owned by the Government of Botswana. Established in 2012, ODC has quickly emerged as one of the leading, global suppliers of responsibly sourced diamonds with a turnover in excess of $900 million per annum.
ODC currently sells 25 percent of Debswana diamonds sourced from Jwaneng, Orapa and Letlhakane mines which is around 6 million carats. The company then sells to different Sightholders and diamond dealers who then sell the product to different diamond cutting and polishing firms across the world.
“Currently we handle around 6 million carats which we get from Debswana, but our current building was acquired initially when we were handling 15 percent of Debswana produce so really it can’t take anymore that’s why we had to build a bigger facility at the innovation park” he said
Mr Masire said the new facility will allow Okavango Diamond to now handle between 10 -12 million carats per year “That is double the number we are currently handling, so should we get more from Debswana after the negotiations between De Beers and Botswana Government we will be ready, but still if we don’t we will be ready to handle more rough from other producers outside Debswana or even outside the country” he said