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Debswana to remain focused on diamond mining for now

Publishing Date : 11 November, 2019

Author : ALFRED MASOKOLA

Leading rough diamonds producer Debswana, a joint venture between Government of Botswana and De Beers Group, will in the near term to midterm remain focused on solely doing the business of mining diamonds. This was emphasized by De Beers Group Chief Executive Offer and Debswana Board Chair Mr Bruce Cleaver and Permanent Secretary in the Ministry of Mineral Mmetla Masire at a media briefing on the side lines of the 2019 Diamond Conference in Gaborone on Tuesday.

GENESIS OF THE ISSUE

Observers,  commentators  and  some political leaders have opined in various platforms that Debswana as the Botswana ‘s largest private company  and one of the most widely celebrated Public Private Partnerships across the world needed to take the lead in Botswana’s economic transformation and diversification agenda. Suggestions has been that in the interest of the national social investment agenda of job creation, economic diversification, and industrialization Debswana should venture into other commercially viable enterprises outside the business of mining diamonds.


Debswana is the largest private sector employer and the second after government, with a total workforce pool of around 5000 direct employees and additional thousands in contractors and service providers. Recently towards the buildup of Government negotiations with De Beers aimed at renewing sales vows it emerged that there were talks within the government enclave calling for the two parties to have a conversation around allowing the partly state owned diamond giant invest in other sectors of the economy.


The argument brought forward by those who believe in this is that Debswana has the necessary capital, technical capacity and shrewd corporate governance to do that “There are discussions that Debswana should lead economic diversification by investing in solar energy, plant and equipment assembly and machinery equipment amongst others” shared a source from the highest corridors of government enclave last month.


Debswana has over the years of its existence invested in other establishments outside diamond mining. Morupule Coal Mine was a wholly owned Debswana operation before it was disposed to government owned Mineral Development Company in 2017. Botswana Accountancy College, the country’s premier business academic institution was established as a joint venture between Debswana, Ministry of Finance and Economic Planning and the Botswana Institute of Accountants in 1996.Within its fold Debswana also wholly owns Sesiro Insurance Company, a bespoke insurance services outfit for its employees.


During the Presidential Debates of the just passed general Elections President of the Alliance for Progressives Ndaba Gaolathe noted that Debswana one capable company that has grown into a successful business with admirable corporate governance over the years “We should replicate this Debswana DNA across other economic sectors and even other countries, for our benefit as developing country that wants to industrialize and transform its economy,” he said.


GOVERNMENT- DE BEERS RESPONSE


When responding to this  suggestions at the media briefing, representing De Beers Group, CEO Bruce Cleaver said the issue was a conversation the two parties would open up to discussing at board level in the long run and coming future “We are open to such conversations because we want to support government as well with economic diversification but for now Debswana is primarily a diamond mining entity that is battling with industry challenges and predominantly expanding its operations which are highly technical and capital intensive,” he said.


Bruce Cleaver further added that the Cut 3 and Cut 9 project s will require Debswana management teams to be completely focused to deliver production peaks and high value return of investment,   “Investing in other businesses in other sectors of the economy is not something completely out of the outlook but our priority as of now is rubberstamping the company’s position as a leading rough diamond producer amid industry challenges.”


Bruce Cleaver who is Chairman of Debswana Board said the shareholders would open up to a conversation about this in future” We are currently also focusing on some operating models transformation, building a high performance team with unparalleled capacity and ability to take this company which is the cornerstone of our business to greatest heights that are presented by both the challenges and opportunities we are seeing in the horizon.”


Representing Government, Permanent Secretary in the Ministry of Mineral Resources,  Mmetla Masire explained that investing in other business outside mining would require serious due diligence and proper assessment to avoid risking the revenue profile of the company, “ Remember Debswana is the cornerstone of our economy so as much as we would be interested in looking around for other ventures under the investment dispatch of Debswana , we would also need to be extra cautious because we don’t want to danger the very  entity that is  holding our economy as country,” he said.


For his part Country Manager of De Beers Botswana, Neo Moroka who has been a Member of Debswana at various levels shared that the company will continue supporting government efforts through Small Medium Enterprises Development, supporting local suppliers and services providers. “Debswana has a clear Corporate Social Investment policy, Citizen Economic Empowerment windows that we believe are pushing the economic transformation already, dispatching millions of pulas through doing business with local companies that hire our people,” he said.

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