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De Beers wary of explosion of trade war despite glittering 2018

All glitter and sparkling like a diamond as total revenue increased by 4 percent, to $6.1 billion (P611 billion) in 2018 from $5.8 billion (580 billion) in the previous year. De Beers Group executive vice president Paul Rowley revealed this week when presenting preliminary financial results for 2018 that last year the group delivered a “robust” financial and operational performance despite headwinds which will continue to haunt the Group into 2019.

The rough diamond sales also shined by 4 percent, increasing to $5.4 billion (P540 billion) in 2018 from $5.2 billion (P520 billion) and De Beers on Thursday said this is driven by improved overall consumer demand for diamond jewellery and a 1% increase in the average rough diamond price index.

According to De Beers preliminary financial results for 2018 the average realised price increased by 6 percent to $171/carat from $162/carat in 2017, reflecting the lower proportion of lower value rough diamonds being sold in the second half, which resulted in a 2 percent decrease in consolidated sales volumes to 31.7 million carats from 32.5 million carats in 2017.

The financial results also states that other revenue also increased owing to improved ‘high end’ jewellery sales at De Beers Jewellers (consolidated for a full year in 2018, compared with nine months in 2017), partly offset by a 5 percent decrease in Element Six revenue due to a reduction in sales to the oil and gas market. The De Beers rough diamond production increased by 6 percent to 35.3 million carats from 33.5 million carats in 2017 and this was in the lower half of the production guidance range of 35-36 million carats.

In Botswana’s Debswana production increased by 6 percent to 24.1 million carats from 22.7 million carats in 2017. De Beers also said production at Jwaneng was flat, as the effect of processing planned lower grades was offset by a 12 percent increase in plant throughput. The mining giant said at Orapa, a 13 percent increase in output was driven by higher plant utilization and the full effect of the successful restart of the Damtshaa operation.

According to De Beers, production in 2019 is expected to be in the range of 31-33 million carats, subject to trading conditions. The lower production is driven by the planned process of exiting from the Venetia open pit, with the underground operation becoming the principal source of ore from 2023, according to De Beers.

The major diamond group said associated with this, an increased proportion of production in 2019 is expected to come from De Beers Group's joint venture partners, a proportion of which generates a trading margin, which is lower than the mining margin generated from own-mined production.

Diamonds demand and the trade war

De Beers vice president Rowley said although current economic forecasts remain positive, the outlook for 2019 global diamond jewellery consumer demand faces a number of headwinds. Chief among headwinds is the risk of a potential intensification of US-China trade tensions, the Chinese government’s ability to rebalance economic growth towards consumption and further exchange rate volatility.

Rowley sees China as a biggest market for De Beers diamonds while he regards the US as a “mature market.” The De Beers executive also said India is a “potential market.” According to De Beers the global growth during the first half of 2018 was driven by solid US and Chinese consumer demand.


The Group said during the second half, while the US maintained its growth rate, increased political and policy uncertainty and stock exchange volatility led to a general slowdown of demand.  When explaining the demand dynamics further, De Beers said the midstream started the year on a positive note due to healthy demand for polished diamonds from US and Chinese retailers.

However, in the second half, the low-priced product segment came under considerable pressure due to weak demand and surplus availability, the rapid depreciation of the rupee and a reduction in bank financing in the midstream.  According to De Beers, this resulted in a surplus of low-priced polished diamonds at the end of the year, leading to lower sales at the start of 2019.

When making reference to the trade war whose mediatory bilateral talks are impending, Rowley said Chinese demand also slowed following the escalation in US-China trade tensions, slower economic growth and stock market volatility. Rowley said in India the significant depreciation of the rupee reduced local demand in US dollar terms.

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Food prices continue to rise, but at a slower rate

28th November 2022

Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.

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Still doing business the old way?

18th November 2022

It’s time to get business done better with MTN Business Botswana’s ICT Solutions.

Running a digital businessMTN Business Solutions Botswana, popularly known as MTN Business is an Internet Service Provider. We are a subsidiary of MTN Group Limited, a multinational telecommunications Group headquartered in South Africa, which operates in 19 markets across Africa and the Middle East.

More and more, clients are looking for ways to keep their staff productive in a dynamically changing business environment. Whether your people are working from home, the office or abroad, there is a growing recognition that digitising your operations can offer unprecedented commercial value in flexibility, productivity and growth. This new, digital reality means that it is more important than ever to stay agile – if there is anything that can slow a business down, it is being burdened by othatld technology.

Having made substantial investments in fibre technology, high-speed terrestrial and undersea networks and new frequency spectrum across the markets wherein it operates, MTN is perfectly positioned to respond to this shift in the market.

A few years ago, MTN also made the decision to build an IP capable radio network for its mobile services, giving its core network the ability to seamlessly integrate with enterprise IP networks. The mobile towers deliver services to enterprise clients absolutely anywhere it has a network, shortening the last mile and removing complexity and cost.

Now there is increasing demand from clients to connect their remote sites in all areas, including rural and semi- rural. MTN has assisted clients with overcoming this connectivity hurdle, enabling their staff to get the job done wherever they are.
MTN’s evolution

For MTN, the focus has shifted from just being a core telecommunications services provider, towards also becoming a technology solutions provider. The service offering now also includes Unified Communications, Data Hosting and Cloud Solutions, Security-As-A-Service and Managed Network Services. The scope has changed to being client and industry specific, so the requirements and service portfolio vary from one client to the next. The expectation is that a company like MTN must respond to these challenges, helping clients to get business done better as they shift from old to new technologies.

As many businesses continue to grapple with a digitally dynamic world, they face new challenges that have to be solved. This environment will benefit those that are more digitally enabled and agile. It is a brave new world that will favour online over on-site, wireless over wired and fluid over formulaic. Businesses will seek out partners and suppliers that are every bit as flexible and forward-looking as they are.
Ultimately, clients need partners like MTN Business that will invest in infrastructure, deliver the services they require, have market credibility, are financially sound and have a long-term commitment to their market presence.

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BIE to vitalize the Dignity of Engineers

9th November 2022

Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in  which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.

The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.

Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.

“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.

He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.

Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.

“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.

He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.

He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc

“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran

Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.

“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.

Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that  the BIE provides a fertile environment where they can meet, share ideas and grow professionally.

“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.

He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.

“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams

He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .

Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution  said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.

“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.

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