Connect with us
Advertisement

New Diamond deal – Not yet Uhuru

Correspondent KEITERILE PHINEAS MALETSI delves on the recent momentous breakthrough deal that Botswana and the diamond multinational De beers brokered. With the palpable exhilaration reaching fever pitch at the Government Enclave and the Diamond Park in Block Eight (8) it is not yet time to pop up the champagne, because all that glitters is not gold diamond. We have not done anything unprecedented but just a marginal improvement of our last concession and this feature shows you why the ‘Masisi Diamond Deal’ does not render Botswana economically free. 

The June 30 watershed deal between the over a century old, diamond multinational, De beers Diamond Corporation and the Government of the Republic of Botswana had a dire ramification if it could have collapsed. The non-renewal was ghastly to contemplate to say the least. The renewal of the vows between trusted partners had its reverberations felt across the world and gave the diamond industry globally a great sigh of relief. Every diamond player waited the verdict with a heavy heart and a bit of panting because this time around unlike in the past the President of Botswana His Excellency Dr. Mokgweetsi Masisi had threatened that if Botswana cannot have her demands met we are ready to chart our own path. That path meant either going it alone now because we assume to have the expertise and the wherewithal’s to mine, cut, polish, value and sell our wares because above all this is our divine endowment. The other possible path was to find an amenable partner who will pander to our infantile whims and prima donna tantrums of getting the larger chunk of the loot but still on the coat tails of DeBeers. The reason why we would still be piggybacking on DeBeers is that without the diamond conglomerate there is no diamond industry. The diamond industry is a de facto duopoly. There are only two serious players worth mentioning currently in the secretive diamond business. There is DeBeers which mines the gemstones which are the most lucrative in the business and there is Alrosa the Russian Diamond titan which mines the most diamond by volume which mostly are used in the industries and hence their name industrial diamonds. From its inception in 1888 until the start of the 21st century, DeBeers controlled 80%-85% of rough diamond distribution and was considered a monopoly. Competition has since dismantled the complete monopoly; the DeBeers group now sells approximately 30% of the world’s rough diamond production by value through its global sightholders and auction sales business. The DeBeers Diamond Corporation pioneered this diamond industry by attaching sentimental value to the gems to make them lucrative and controlled their supply to make them scarce so as to make their demand high and expensive. Diamond in its raw form is just a carbonaceous shining stone without any intrinsic value of which without the help of De beers it would probably sell for a price of gravel.

The acrimonious negotiations which preceded the signing on the dotted line were led by the first office on the land, insisting that we should get the lion share of the proceeds of the sales of our diamonds because we have been cheated by the diamond hegemon all along. The negotiating team from the DeBeers Group led by Bruce Cleaver, the former Group CEO assisted by his successor Al Cook and DeBeers resident Director Mr. Neo Daniel Moroka met with the President and tried to allay his fears that in actual fact Botswana has been getting the lion share from taxes, dividends and royalties. The numbers they put forward to his Excellency was that Botswana has been getting almost 67 % of all the monies accrued from the sales of the diamonds from Debswana. As a country we could not point out exactly how and where are the caveats of our partnership. Our negotiating team led by our chief technocrat, the Permanent secretary to the President are neophiles and novices in striking deals of that nature let alone understand how the diamond industry works. The DeBeers negotiating team are a pack of shrewd negotiators and businessmen with outstanding acumen more especially Bruce Cleaver. The man is a colossal wordsmith and thinks on his feet. He crafts his speech with panache and the right choice of words for any occassion. He has a high sense of occassion. Their business acumen is akin to that of a Colombian drug-lord with an MBA from Harvard School of Business. The problem with our DeBeers partnership is that it overlaps and sometimes causes confusion as to which entity of the three are we talking about. Debswana is a 50-50 joint venture between The Republic of Botswana and the DeBeers Diamond Corporation, DeBeers is majority owned by Anglo-American and Botswana owns 15% shareholding. It is this overarching shareholding structure where we are been cheated.

The new sales agreement is that Okavango Diamond Company (ODC) will start getting 30% of the rough diamonds from Debswana until it reaches 50 % within the duration of the sales agreement. In Botswana we literally have a 57.5% stake in Debswana because of our cross-shareholding in DeBeers. We own 7.5% in Namdeb because of stake in DeBeers. We own a 15% stake in the South African Diamond Mines owned by DeBeers lastly we own 15 % of the Canadian DeBeers Mining propriety. Any Percentage we are given to sell for our self should never be a celebration because we do not know the diamond inventory of DeBeers at any given time since we became minority shareholders in DeBeers International. We don’t know the inventory because we do not have people who are standing sentinel for us in all DeBeers mining operations. They agreed so to say to increase what we can sell for ourselves knowing that we don’t know the total inventory of the DeBeers Group at any given time. Any percentage of what you do not really know as a whole should not be a cause for toasting.  In the Debswana arrangement we have accrued more than we bargained for but in DeBeers we are just a partner in titular nomenclature in reality. We should have bargained to get 30 % of all DeBeers group throughput which is better than 50% of Debswana’s output. Our position of strength in the bargaining is that within the DeBeers stable we are the goose which lays the golden egg.

The diamond development fund which is also part of the historic deal was a tell-tale for a discerning mind that we were far from getting a better deal that suits us. We can never be thanked by being given a bounty by the people we cornered and have usurped more benefits from. A billion pula to the DeBeers group is a pittance. In actual fact the 1 billion pula is a gift to the negotiators to make such a big brouhaha but got nothing at the end of day. The folly of it all was to make such secretive negotiations public before the agreement was reached. The better deal which our negotiating team and His Excellency was to do is to force DeBeers group to allow Batswana and Batswana companies to be licensed as Sightholders. This would have been the best way of empowering Botswana and its people for posterity beyond the diamond life. It would be the start of creating Diamantaires and our love life with DeBeers would have been consummated. So long as the DeBeers and Botswana diamond story has not had a trickle-down effect to create millionaires it would be a song without a melody. Jurisdictions which are by far not as wealthy as we are in terms of diamond resources have created multimillionaires out of diamonds. The current Lesotho Prime Minister, Ntsokoane Samuel Matekane is a diamantaire.  He was into diamond mining and marketing because his government made it possible and conducive for him to venture into that type of business. He is a national pride and asset. With Botswana being the longest unencumbered running democracy and a diamond destination it is an anathema that we have not fully reaped the rewards of our most precious of our divine endowment. We should strive to achieve economic freedom in our lifetime and not defer the dream of our era but dealing with the Cecil John Rhodes of this world, the struggle continues.

 

 

Continue Reading

Digital Version

29 SEPTEMBER 2023 Publication

29th September 2023

This content is locked

Login To Unlock The Content!

Continue Reading

News

BMD disapproves homosexuality

26th September 2023

The newly elected Botswana Movement for Democracy (BMD) Executive Committee led by Pastor Reverend Thuso Tiego has declared their disapproval of homosexuality saying it is anti-Christianity and Botswana culture.

Speaking at a Media Briefing this past week, BMD President Tiego said Botswana has been a country that respects culture hence endorsing homosexuality will be catastrophic.

“Our young generation grew up being taught about types of families, if homosexuality is passed, at what age will our children be introduced to homosexuality?” he rhetorically asked.

He continued: “If we are going to allow homosexuality then the next day, another person will come and say he wants to practice bestiality. What are we going to do because we have already allowed for this one (homosexuality) and at the end it will be a total mess.” Bestiality is sexual relations between a human being and an animal

This according to Tiego will give those people an opportunity thus disrupting known Botswana beliefs. He however dismissed any notion that the decision to condemn homosexuality should not be linked to the top two of the committee who are men of cloth. “This is a decision by the whole committee which respects the culture of Botswana and it should not be perceived that because we are clergymen we are influencing them, but even if we do, politics and religion are inter-related.”

Of late the church and the human rights organization have been up in arms because of the high court decision to allow for same sex marriages. Ministries ganged up, petitioned parliament and threatened to vote out any legislator who will support the idea. The ruling party, BDP which was to table the amendment in the constitution, ended up deferring it.

BMD President further revealed that he is aware of what really led to the split of the party and he is on course to transform as they approach 2024 elections.

“There are so many factors that led to split of party amongst others being leadership disputes, personal egos and ambitions, toxic factionalism and ideological difference just to mention a few, but we are transforming the party and I am confident that we will do well in the coming elections.

In addition, Tiego is hopeful that they will take the government as they feel it is time to rebrand Botswana politics and bring in fresh blood of leaders.

He further hinted that they are coming with positive transformation as they eye to better the lives of Batswana.

“When we assume government, we promise to be transparent, free and fair electoral processes and encourage pluralism as way of getting back to our roots of being a democratic country as it seems like the current government has forgotten about that important aspect,” Tiego explained.

Continue Reading

News

North Korea diplomats in suspected illegal ivory trade

26th September 2023

Reeling under the increasing barrage of stinging international sanctions, the isolated North Korean regime is reportedly up to its old trickery, this time in a more complicated web of murky operations that have got the authorities of five southern African countries at sixes and sevens as they desperately try to tighten their dragnet around Pyongyang’s spectral network of illicit ivory and rhino horn trade.

It is an intricate network of poaching for elephant tusks and rhino horns that spans Botswana, Mozambique, South Africa and Zimbabwe, with the main sources of the contraband being Botswana and South Africa.

The syndicate running the illegal trafficking of the poached contraband is suspected to be controlled by two shadowy North Korean government operatives with close links to one Han Tae-song, a disgraced North Korean career diplomat who, while serving as the second secretary at his country’s embassy in Harare, Zimbabwe, was expelled in 1992 after he was fingered as the mastermind behind a similar illegal ring that was busted by the country’s authorities.

This disturbing tale of malfeasance by North Korean state actors is as real as it gets.

Recent reports indicate that authorities in the source countries are jointly battling to plug holes created by the shadowy syndicate which allegedly has on its payroll, park rangers, border officials and cross-border truck drivers.

Even more disturbing are allegations that some wildlife officials are conniving in misrepresenting numbers of retrieved rhino horns and ivory from poachers and getting kickbacks for their involvement in the pilfering of ivory and rhino horns from government stockpiles especially in South Africa.

In a shocking and well-orchestrated movie-style heist in South Africa, thieves in June this year made off with 51 rhino horns after breaking into a very secure government stockpile facility of the North West Parks Board (NWPB).

While some suspects from South Africa and Malawi were nabbed in a government sting operation, none of the rhino horns – 14 of which were very large specimens that can fetch serious money on the black market – were recovered.

A report of the heist said the police were lethargic by eight hours in responding to an emergency alert of the robbery which was described by North West police spokesperson Brigadier Sabata Mokgwabone as “… a case of business robbery…”

Thabang Moko, a security analyst in Pretoria says the military precision in the burglary, delays in police response, and failure to recover the stolen rhino horns is dubious. “This development lends credence to suspicions that some government officials could be part of a shadowy syndicate run by foreign buyers of rhino horns and ivory,” Moko says.

It is understood that in light of the rhino horns heist in North West, South Africa’s Minister of Environment, Forestry and Fisheries, Barbara Creecy on 1 August, shared her concerns to her counterparts in Botswana, Zimbabwe and Mozambique calling for greater regional cooperation to combat the illegal wildlife trafficking which she believes is being masterminded by the Far East’s buyers of the ill-gotten horns and ivory.

It is believed that foreign kingpins involved in perpetuating the illegal trade are mainly North Koreans vying against Vietnamese and Cambodian buyers in the quest for dominance of the illicit trade in rhino horns and ivory sourced from southern Africa.

Creecy’s concerns, which she also shared to South Africa’s state-run broadcaster SABC, echoed Moko’s worries that the North West heist may have been an inside job.

According to Creecy, there was a need for the International Criminal Police Organisation (Interpol)’s greater involvement in joint investigations by affected countries as there were indications of ‘local knowledge’ of the North West job and that syndicates, “Higher up the value chain actually recruit park rangers to the illegal ivory trade network.”

Botswana’s Environment and Tourism Minister Philda Kereng is on national record admitting that poaching was a source of headaches to her government, especially considering that the daring poachers were making successful incursions into secure areas protected by the Botswana Defence Force (BDF).

This came after poachers gunned down two white rhinos at the BDF-protected Khama Rhino Sanctuary in August 2022 despite Kereng putting the time frame of the killings between October and November 2022.

Kereng hinted at the existence of Asian controlled syndicates and acknowledged that the surge in poaching in Botswana is driven by the “increased demand for rhino horn on the international market” where in Asia rhino horns are believed to be potent in traditional medicines and for their imagined therapeutic properties.

Botswana has in the past recorded an incident of a group of an all-Asian reconnaissance advance team teams being nabbed by the country’s intelligence service in the Khama Rhino Sanctuary.

Masquerading as tourists, the group, with suspected links to North Korea and China, was discovered to be collecting crucial data for poachers.

Also according to reliable information at hand, an undisclosed number of wildlife parks rangers were arrested between September 2022 and January this year, after information surfaced that they connived in the smuggling of rhino horns and ivory from Botswana.

One of the rangers reportedly admitted getting paid to falsify information on recovered horns and ivory which were smuggled out of the country through its vast and porous eastern border with South Africa, and making their way to their final destination in Mozambique via back roads and farmlands in South Africa and Zimbabwe.

“We are aware that in the past year, some rhino horns and ivory illegally obtained from Botswana through poaching activities and shady deals by some elements within our wildlife and national parks department, have found their way out of the country and end up in Mozambique’s coastal ports for shipment to the Far East,” a Department of Wildlife and National Parks (DWNP) source says.

Independent investigations reveal that two North Korean buyers, one of them only identified as Yi Kang-dae [confirmed to be an intelligence official in the country’s state security apparatus], acting on behalf of the disgraced Han Tae-song, financed the entire operation on two occasions between 2022 and 2023, to move at least 18 rhino horns and 19 elephant tusks from Botswana, including pay-offs – mostly to border patrol and customs officials for safe passage – along the knotty conduit across South Africa’s north western lands, then across south-eastern Zimbabwe into Mozambique.

According to a trusted cross-border transport operator in Zimbabwe, the rhino horns and elephant tusks were illegally handed over to smugglers in Mozambique at an obscure illegal crossing point 15km north of Zimbabwe’s Forbes Border Post in November 2022 and February this year.

The end buyers in Mozambique? “It is quite an embarrassment for us, but we have solid evidence that two North Korean buyers, one of them who is linked to a former notorious diplomat from that country who has been in the past involved in such illegal activities in Zimbabwe, oversaw the loading of rhino horns and ivory onto a China-bound ship from one of our ports,” a top government source in Maputo said before declining to divulge more information citing ongoing investigations.

 

Yi Kang-dae and his accomplice’s whereabouts are presently unclear to Mozambican authorities whose dragnet reportedly recently netted some key actors of the network. Han Tae-song currently serves as North Korea’s ambassador to the United Nations in Switzerland.

North Korean diplomats have in the past used Mozambique as a final transit point for the shipment of rhino horns to the Far East.

In May 2015, Mozambican authorities nabbed two North Koreans, one of them a Pretoria-based diplomat and political counsellor identified as Pak Chol-jun after they were caught in possession of 4.5kg of rhino horn pieces and US$100,000 cash.

Pak’s accomplice, Kim Jong-su, a Taekwondo instructor also based in South Africa, was fingered as a North Korean spy and returned to North Korea under suspicious circumstances on the heels of Pak’s expulsion from South Africa in November 2016.

A security source in Zimbabwe closely following current developments says there is a big chance that Han Tae-song may have revived the old smuggling network he ran while posted in Zimbabwe in the 90s.

“The biting international sanctions against North Korea in the past decade may have prompted Han to reawaken his network which has been dormant for some time,” the source says. “There is no telling if the shady network is dead now given that Han’s two front men have not been nabbed in Mozambique. More joint vigilance is needed to destroy the operation at the source and at the end of the line.”

North Korean diplomats have, as early as October 1976, been fingered for engaging in illegal activities ranging from possession of and trade in ivory pieces, trade in diamonds and gold, the manufacture and distribution of counterfeit currencies, pharmaceuticals, and the sale on the black market, of a paraphernalia of drugs, cigarettes, alcohol and other trinkets on the back of protracted and biting international sanctions against the reclusive state for its gross human rights abuses against its own people and flagrant nuclear tests.

These illegal activities, according to a US Congressional Research Service (CRS) report, have raked in at least US$500m annually for the Pyongyang regime. Other global studies estimate that North Korea’s illegal earnings from the black market are around $1bn annually, and are being channelled towards the country’s nuclear weapons programme, while ordinary North Koreans continue to die of mass starvation.

In February 2014, Botswana, citing systematic human rights violations, severed ties with North Korea with the former’s president Mokgweetsi Masisi (then vice president) calling North Korea an ‘evil nation’ on 23 September 2016, at a United Nations General Assembly forum in Washington, USA.

Botswana has close to 132,000 elephants, more than any of its four neighbouring countries, namely Angola, Namibia, Zambia and Zimbabwe, according to a 2022 Kavango Zambezi Transfrontier Conservation Area (KAZA TFCA) Elephant Survey.

The rhino population in Botswana has significantly dwindled, with poaching a leading cause of the decimation of the country’s rhinos. Despite dehorning and relocating its diminishing rhino population from the extensive Okavango Delta to undisclosed sanctuaries, Botswana has since 2018, lost 138 rhinos to poachers.

The sharp spike in rhino poaching in Botswana came after the country’s government made a controversial decision to disarm park rangers in early 2018.

In a statement delivered in November 2022 to the Convention on International Trade in Endangered Species (CITES) CoP-19 in Panama, the Botswana government instead blamed the surge in poaching to a shift of foreign-sponsored organised poaching organisations from South Africa to Botswana.

“This increase in rhino poaching in Botswana coincided with a decline of rhino poaching in South Africa from 2018 to 2020, suggesting a displacement of the poaching syndicates from South Africa to Botswana,” the statement reads. “The recent decline in rhino poaching in Botswana (2021 and 2022, relative to 2020) coincides with the increase in rhino poaching in Namibia and South Africa, further suggesting displacement of the poaching syndicates across the sub-region.”

According to the Botswana government, as of 13 November 2022 the country has secreted its shrinking rhinos (only 285 white rhinos and 23 black rhinos) in undisclosed locations within the country’s borders.

South Africa has close to 15,000 rhinos. Between January and June 2022 alone, poachers killed 260 rhinos in South Africa for their horns. The country is home to the majority of Africa’s white rhinos, a species whose existence remains under threat of extinction due to poaching.

The major threat posed by foreign state actors including those from North Korea, to southern Africa’s rhino and elephant population remains grim as the bulk of the rhino horns and elephant tusks reportedly continue finding their way to the Far East, where China is being used as the major distribution centre.

Continue Reading