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Reunion of the Originals


The fairy tale that is Botswana’s diamond story started with a pack of prospectors that traversed the rough terrain of the Boteti area, with nothing more than the most rudimentary tools at their disposal.


Orapa was nothing more than a single cattle post for a Basarwa family while the nearby Letlhakane was not much bigger. Anglo American’s Jim Gibson, Manfred Marx the Australian and Dr Norman Lock led a team that would brave the most harsh of conditions to find the magic stones that decades later remain the corner stone of this country’s economy, contributing 60 percent to the Gross Domestic Product annually.


Flanked by locals, Eleven Malema who carried a hand compass and did the navigation, as well as Gabosekegwe Nthanogeng, Kgosiemang Diepo and a few others, they found the stones.
The old timers recall how hard they worked and the very low pay, which casts a shadow over their experiences.


Last weekend, Debswana performed its last lap of its 45th anniversary celebrations by first hosting a diamond pipeline seminar at Gaborone Sun Hotel and Conferences on Friday 7th November, which was graced by the original prospectors as well as other stakeholders in the industry, among them a former Minister of Mines and Natural Resources, Dr Gaositwe Chiepe.


A gala dinner followed in the in evening at Gaborone International Conference Centre (GICC) on the same day. On the morning of the 8th, the commemorations where the prospectors and media and other invited guests were airlifted to the original mining town of Orapa, for a brief ceremony concluded by an exhibition diamond business enterprises.


Sitting, eating, drinking and making merry together, forgetting the racially charged undertones of the past, there was a sense of nostalgia that could bring tears to the eyes, as Jim Gibson related to the discovery of diamonds in Botswana.
Dr Norman Lock found a Motswana lass and married her; none other than human rights activist Maleta Mogwe-Lock, the daughter of former Cabinet minister Archibald Mogwe.


Fast forward forty five years and Botswana remains a top global producer in terms of both volumes and value.


The opening of Jwaneng Mine in 1980 catapulted Botswana to the status of top producer, a whole thirteen years after the first fruitful prospecting was carried out.


After many years of mining, the key word is now beneficiation. When it comes to the geographical location of cutting and polishing, the Diamond Insight Report 2014 states that the move towards low-cost centres in India and the Far East is likely to have reached its peak. Over recent years, producing countries such as Botswana, South Africa and Namibia have been striving for increased domestic beneficiation, leading to some cutting and polishing jobs migrating to those countries.

Diamonds are critical to the economies of some producing nations. In Botswana, for example, diamonds represent more than one quarter of GDP and over three-quarters of overall exports whereas in Namibia they represent eight per cent of GDP and almost 20 per cent of exports.

However, diamond mining in itself only creates a limited number of jobs (as is also the case with other types of mining) since it is capital-intensive rather than labour-intensive. Botswana’s budding cutting and polishing industry employs over 3750 people locally.


A snapshot of the diamond industry now shows that Global diamond jewellery sales were an estimated US$79 billion in 2013, growing at over three per cent in nominal value in 2013 in USD terms vs 2012, ahead of the compounded annual rate of growth experienced between 2008 and 2012.

China continues to be the main growth engine of diamond jewellery demand, but the US also performed particularly well in 2013. In terms of polished diamonds contained in diamond jewellery at cutting centre wholesale value, demand increased by over three per cent from 2012 to 2013, to reach approximately US$25 billion.

The two biggest markets, the United States and China, both grew by more than the global average, with sales of polished diamonds increasing 7 per cent in the US and 14 per cent in China, measured in USD terms. In contrast, both India and Japan saw sales fall (by six per cent in Japan and 10 per cent in India, measure.

Global rough diamond sales by producers increased approximately five per cent from 2012 to 2013, to reach a total of just under US$18 billion. De Beers, Botswana Government’s equal partner Debswana, remained the largest supplier with roughly 33 per cent of overall sales measured by value (the same share as in 2012), followed by ALROSA with 25 per cent of sales (vs 23 per cent the year before).

Other primary suppliers included SODIAM (Angola) with an estimated six per cent share, Rio Tinto with a five per cent share and Dominion Diamond Corporation and the Zimbabwe alluvial producers with about four per cent each, all in approximate USD value terms. A variety of rough diamond sales channels are used by primary suppliers. De Beers uses multi-year contracts with more than 80 term contract clients – Sightholders – to sell most of its production.


De Beers has also used sophisticated online auctions since 2008 to sell a proportion of the Group’s production. In recent years, ALROSA has established three-year supply agreements with a selection of customers and supplements these saleswith one-time sales as well as competitive bidding. However, some producers, such as Gem Diamonds and Petra Diamonds, use an auction-only platform.

THE DIAMOND JOURNEY
1954 – 1966 “The lean and mean period” – this includes De Beers (Kimberlitic Searches) preparation for establishing prospecting units in the then Bechuanaland, establishing its base in Lobatse and slowly building up resources and capability. This was a lean and mean period for diamonds; the only two kimberlites, discovered near Mochudi, turned out to be non-diamondiferous.

1967 – 1972 “The wonderful discovery era”, a period that is in stark contrast to the previous one. Over 50 Kimberlites, mostly diamondiferous, were discovered by De Beers Prospecting, during this five year period, including Orapa A/K1, the second largest mined kimberlite in the world (after the Madui pipe at the Williamson Mine in Tanzania) and also 2125 D/K1 and D/K2, later to become the Debswana Letlhakane Mine and 2424D/K2 at Jwaneng, later to become Jwaneng Mine.

1971 – 1982  This was “The decade of big mine commissioning and openings” in Botswana which firmly placed Botswana on the world diamond scene, later to become the largest diamond producer by  value.

1980 – 2011 “Prospects re-visited”. Over the last 30 years, original De Beers kimberlite discoveries in the 1960’s and 1970’s, which were abandoned at the time for being uneconomic, have been re-visited by others, using more advanced evaluation technology now available, and have shown the kimberlites to be now economic. Such examples are kimberlite pipes B/K 11 and A/K6 in the Orapa Kimberlite field, discovered by De Beers in 1967 and 1970 respectively, and which have now been revisited by Firestone Diamonds in 2008 and Boteti Mining in 2009, and both are now diamond mines.

 2003 – 2011 “The smaller mines period”. Damtshaa Mine was opened in 2003, Lerala Mine in 2008 and both B/K11 and A/K 6 (Karowe) Mines in 2011.

2006 – 2011 “The diamond valuation and trading consolidation period”. It saw the establishment of the Diamond Trading Company Botswana (DTCB) in 2006, which replaced the former Botswana Diamond Valuing Company (BDVC), the selection of Botswana’s first diamond Sightholders, then 16 in number. In 2007 and the construction of the DTCB Head Quarters in 2008, the largest rough diamond sorting and valuation facility in the world.

In 2011, for the first time, it was also agreed that the Botswana Government would independently sell 10 percent of the Debswana run-of-mine production increasing by 1 percent each year to 15 percent in 2016. De Beers also agreed to relocate Diamond Trading Company International (DTCI) from London to Gaborone by the end of 2013.

As a result, the Diamond Technology Park was opened in 2008 along with the Botswana Government’s Diamond Hub. In 2011, Botswana became a full member of the International Diamond Manufacturing Association and hosted its annual conference in Gaborone. In 2008, the Botswana Government clustered a number of major development projects into six hubs to attract internal and external investment. A Diamond Hub was established to facilitate beneficiation and promote Botswana as one of the world’s major diamond trading centres. The following additional initiatives have also been supported by Government:-

The construction of a new Debswana Corporate Centre in 2007 ; the formation of the Botswana Diamond Manufacturer’s Association in 2007; The construction Of a Diamond District incorporating a Diamond Technology Park in 2008; The 2008 construction of a Diamond Trading Company Botswana sort house, the largest sorting and valuation facility in the world; A strategy for the development of diamond cutting, polishing and jewellery making skills, launched in 2009; The construction of a Secure Transfer Facility (STF) at Sir Seretse Khama  International Airport in 2010; The 2011 agreement By DTC International to move all of its sales and other operations  to Botswana before the end of 2013; The formation In early 2012 of The De Beers Aggregation Company in Botswana which will undertake the aggregation of all  De Beers worldwide diamond production in Botswana for the first time; The formation Of Botswana’s First state diamond trading company, the “Okavango Diamond Company”, in 2012, which would go on to sell diamonds independently from DTCB, commencing with 10 percent of the run of Debswana’s total annual production.
 

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BONELA speaks on same-sex decriminalization case

18th October 2021
BONELA

In June 2019, a case involving the Attorney General was brought before the High Court, in which the applicant Letsweletse Motshidiemang challenged Sections 164 (a) and 167 of the Penal Code. The applicant contended that these sections are unconstitutional because they violate the fundamental rights of liberty and privacy. 

The applicant argued that these sections violated his right and freedom to liberty as he was subject to abject ignominy. These laws subjected the LGBTIQ community to brutal and debasing treatment through social control and public morality. On the 1st of November 2017, the Botswana High Court further allowed Lesbians, Gays and Bisexuals of Botswana (LEGABIBO) to join the case as amicus curiae.

However, in July 2019, the respondents, in this case, i.e. the Government, filed an appeal against this iconic High Court ruling seeking re-criminalization of homosexuality. Human Rights Group has criticized this move of the Government all over the world.  The appeal was heard before five judges at the Court of Appeal on Tuesday. The State was represented by Advocate Sidney Pilane, while LEGABIBO and Letsweletse Motshidiemang were represented by Tshiamo Rantao and Gosego Rockfall Lekgowe, respectively.

Non-Governmental Organizations advocating for the LGBTIQ+ community joined the two parties at the Court of Appeal during this case. They argue that the minority group should enjoy their rights, especially the right to privacy and health. Botswana Network on Ethics, Law and HIV/AIDS (BONELA) Chief Executive Officer, Cindy Kelemi says the issues being raised by LEGABIBO are that as individuals belonging to the LGBTIQ community, they have and must share equal rights, including the right to privacy, which also speaks to being able to involve in sexual activities, including anal sex.

“Those rights are framed within the constitution, and therefore a violation of any of those rights allow them to approach the courts and seek for redress. We do not need the law to be regulating what we do in the privacy of our homes. The law cannot determine how and when we can have sex and with who, so the law does not have any business in that context. What we are saying is that the law is violating the right to privacy,” she said on the sidelines of the decriminalization case in Gaborone on Tuesday.

The first case involving the homosexual act was the Utjiwa Kanane vs the State in 2003. Contrary to section 164(c) of the Penal Code, Kanane was charged with committing an unnatural offence and engaging in indecent practices between males, contrary to section 167. The conduct at issue involved Graham Norrie, a British tourist, and occurred in December 1994. (Norrie pleaded guilty, paid a fine, and left the country.)

Kanane pleaded not guilty, alleging that sections 164(c) and 167 both violated the constitution. The High Court ruled that these sections of the Penal Code did not violate the constitution. Kanane then appealed to the Court of Appeal. BONELA CEO recalls that in its judgment then, the High Court indicated, Batswana were not ready for homosexual acts. Twenty years later, the same courts are saying that Batswana are ready, she says.

“They gave the explicit example that shows that indeed Batswana are ready. There are policies and documents in place that accommodate people from marginalized communities and minority populations. The question now is that why is it hard now to recognize the full rights of an individual who is of the LGBTI community?” She further says intimacy is only an expression. The law that restricts homosexuality makes it hard for LGBTIQ members to express themselves in a way that affirms who they are.

“We want a situation where the law facilitates for the LGBTIQ community to be free and express themselves. The stigma that they face in communities is way too punitive. They are called names; some have been physically violated and raped at times. It shows that the law doesn’t not only prevent them from expressing themselves, it also exposes them to violence.” The law on its own, Kelemi submits, cannot change the status quo, adding that there is a need for more awareness and education on human rights and what it means for an individual to have rights.

“As it is now, it is very tough for some to do that because of a legal environment that is not enabling. We also want to see a situation where LGBTIQ+ people can access services and be confident that they are provided with non-discriminatory services. It is challenging now because health care providers, social workers and law enforcement officers believe that it is illegal to be homosexual. What we are saying is that if you have an enabling law, then that will facilitate for people to be able to express themselves, including accessing health services,” Kelemi said.

“As we are doing this advocacy work, one of the issues that we picked up is that there is lack of capacity, especially on the part of healthcare workers. We noted that when we provide services or mobilize Men who have sex with other men (MSM) to access health facilities, health care workers are not welcoming, forcing them to hideaway. We must put an end to this to allow these people the freedom that they equally deserve.”

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Masisi warns Gov’t officials

18th October 2021
President Masisi

The President, Dr Mokgweetsi Masisi, has declared as an act of corruption the attitude and practice by government officials and contractors to deliver projects outside time and budget, adding that such a practice should end as it eats away from the public coffers.

For a very long time, management problems and vast cost overruns have been the order of the day in Botswana, resulting in public frustrations. Speaking at the commissioning of the Masama/Mmamashia 100 Kilometres project this week, Masisi said: “There is a tendency in government to leave projects to drag outside their allocated completion time and budget. I want to stress that this will not be tolerated. It is an act of corruption, and I will be engaging offices on this issue,” Masisi said.

In an interview with this publication over the issue, the Director-General of the Directorate on Corruption and Economic Crime (DCEC), Tymon Katholo, says, “any project that goes beyond its scope and budget raises red flags.” He continued that: “Corruption on these issues can be administrative and criminal. It may be because government officials have been negligent or been paid to be negligent by ignoring certain obligations or procedures. “This, as you may be aware has serious implications on not only of the economy but even the citizens who use these facilities or projects,” Katlholo said, adding that his agency is equally concerned.

According to the DCEC director, the selection, planning and delivery of infrastructure or projects is critical. In most cases, this is where the corruption would have occurred, leading to a troubled project. A public finance expert at the University of Botswana (UB), Emmanuel Botlhale, attributes poor project implementation to declining public accountability, lack of commitment to reforming the public sector, a decline in the commitment by state authorities and lack of a culture of professional project management.

In his research paper titled, ‘Enhancing public project implementation in Botswana during the NDP 11 period,’ Botlhale stated that successful implementation is critical in development planning. If there is poor project implementation, economic development will be stalled.
Corruption is particularly relevant for large and uncommon projects where the public sector acts as a client, and experts say Megaprojects are very likely to be affected by corruption. Corruption worsens both cost and time performance and the benefits expected from such projects.

Speaking during this week’s Masama/Mmamashia pipeline commissioning, Khato Civils chairman said Africans deserve a chance because they are capable, further adding that the Africans do not have to think that only Whites and Chinese people can do mega projects.  During his rule, former president Ian Khama went public to attack Chinese contractors for costing the government a move that ended up fuelling tensions between China and Botswana after Khama dispatched the then Minister of Foreign Affairs, Pelonomi Venson Moitoi, to China to register Botswana’s complaints with Chinese government-owned construction companies.  Botswana had approached the Chinese government for help in its marathon battle with Chinese companies contracted to build, among others, the failed controversial Morupule B power plant and refurbishment of Sir Seretse Khama International Airport (SSIK).

 

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Guma’s battle for millions of Pula give Court headache

18th October 2021
Guma Moyo

A legal battle between former Botswana Democratic Party (BDP) legislator Samson Moyo Guma and First National Bank (FNB) over a multimillion oil refinery project intensified this week with Justice Zein Kebonang referring the matter to Court of Appeal for determination.  The project belongs to Moyo Guma’s company called United Refineries which he has since placed under judicial management.

The war of words between Moyo Guma and FNB escalated after the company’s property worth millions of Pula were put up for sale in execution by the bank and scheduled to take place on 8th October. It emerges from Court papers that the bank had secured an order from the High Court to place the company’s property under the hammer.

Moyo Guma then also approached the High Court seeking among others that the public auction scheduled for 8th October 2021 be stayed. He contended that the assets that were to be sold belonged in reality to United Refineries and that as the company had been under judicial management at the time of the attachment, the intended sale in execution was unlawful.

He also sought the Court to declare that the writs of execution against the properties of guarantors and sureties of United Refineries Botswana Holdings Propriety Limited (the company) are unlawful.  Moyo Guma also sought a stay of the execution against the property known as Plot 43556 in Francistown, that is, the land buildings, plant and machinery which make up the property and any all immovable or movable property belonging to the guarantors and sureties of the company pending finalization of the winding up of United Refineries.

But FNB disputed Moyo Guma’s assertions and submitted that the properties in question belonged to TEC (Pty) Ltd and not United Refiners. TEC Pty Ltd which is one of the shareholders in United Refineries is one of the sureties and co-principal debtors of a debt amounting to P24 million owed by United Refineries to FNB.  FNB argued in papers that the properties belonged to TEC because it was TEC which had passed a covering mortgage bond in its favour over the property it now sought to execute.

Moyo Guma submitted that the covering mortgage bond passed in favour of FNB did not tell the full story as the property in question was in truth and fact owned by United Refineries and not TEC Pty Ltd. He maintained that the shares had been had been passed by the company in exchange for the properties in question and that the parties had always been guided by the spirt of the share agreement in dealing with each other despite delays in the change or transfer of ownership of plots 43556 and plot 43557 in Francistown.

Kebonang said it was clear to him that the two plots (43556 and 435570 belonged to United Refineries notwithstanding that TEC (Pty) Ltd had passed a mortgage bond over them in favour of FNB.  “For this reason the properties were immune from attachment or sale in execution so long as the judicial management order was in place,” he said.

The background of the case is that Moyo Guma together with five other investors, namely Elffel Flats (Pty) Ltd; Mmoloki Tibe; TEC (Pty) Ltd; Profidensico (Pty) Ltd and Tiedze Bob Chapi, each bound themselves as sureties and co-principal debtors in respect of a debt owed by a company called United Refineries Botswana Holdings (Proprietary) Limited (the Company), to First National Bank Botswana (FNBB) (1st Respondent).

FNB had extended banking facilities to the company in the amount of P24 million which was then secured through the suretyship of Moyo Guma and other shareholders.  Court records show that Moyo had on the 11th February obtained a temporary order for the appointment of a provisional judicial manager in respect of United Refineries and it was confirmed by the High Court on 24th September 2019.

In terms of the final court order by the High Court issued by Justice Tshepho Motswagole all judicial proceedings against the company, execution of all writs, summons and process were stayed and could only proceed with leave of Court. Court documents also show that First National Bank had sued the company and the sureties for the recovery of the debt owed to it and through a consent order, the bank withdrew its lawsuit against the company.

But FNB later instituted fresh proceedings against Moyo Guma and did not cite the company in its proceedings.  “There is no explanation in the record as to why the Applicant was now reflected as the 1st Defendant and why the company had suddenly been removed as the 1st Defendant. There was no application either for amendment or substitution by the bank,” said Justice Kebonang.

FNB had also argued that it sought to proceed to execute against Moyo Guma and other sureties on the basis of the suretyship they signed and that by signing the suretyship agreement, Moyo and other sureties had renounced all defence available to them and could therefore be sued without first proceedings against the principal debtor (United Refineries).  The question, Kebonang said, was that can FNB proceed to execute against Moyo Guma and other sureties on the basis of the suretyship contracts they signed?

“The starting point is that the Applicant (Moyo Guma) and others by binding themselves as sureties became liable for debts of the principal debtor and such liability is joint and several. He said the consequences of placing the company under judicial management means that every benefit extended to it should also extend to sureties.

“If the company is afforded more time to pay or its debt is discharged, reduced or compromised or suspended the obligation of sureties is to be likewise treated. It follows in my view that where judicial proceedings are suspended or stayed against the company, then any recourse against the sureties is similarly stayed or suspended,’ said Kebonang.

He added that “In the circumstances of this case, it seems to me that so long as the company is under judicial management, the moratorium that applies to it must also apply to its sureties/guarantors and no execution of the writs should be permitted against them. Any execution would be invalid.”

“Mindful that there is judicial precedent on this point in Botswana, at least none that I am aware of, and given its significance, I consider it prudent that the Court of Appeal must provide a determinative answer to the question whether a creditor can proceed against sureties where a company is under judicial management,” said Kebonang.

Pending the determination of the Court of Appeal, he issued the following order; the execution of writs issued in favour of FNB against Moyo and other sureties/guarantors of United Refinery are hereby stayed pending the determination of the legal question referred to the Court of Appeal.

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