Kenalemang Moitsheki squints through an eyepiece at a tiny diamond as a cutting tool etches heart-shaped facets on the gem.
Moitsheki had never seen a raw diamond before she secured a training place at Botswana’s new Eurostar cutting factory, even though her country produces a quarter of global supply.
Raw or ”rough” diamonds — cloudy rocks that bear little resemblance to the glistening gems in finished jewellery — have been a bedrock of Botswana’s economy since they were discovered here four decades ago.
But now Botswana wants to move beyond exporting the raw gems to get a slice of the lucrative processing industry and boost employment and its manufacturing sector.
”We’re targeting 3 000-plus jobs, which is quite significant since Botswana’s total manufacturing industry has around 30 000 workers,” said Peter Kettle, an official of diamond giant De Beers in Botswana.
The involvement of De Beers is key to Botswana’s strategy to boost its economy with added-value spin-offs from diamond mining, which already makes up a third of the economy and supplies half of government revenues.
Botswana’s diamonds are produced by Debswana, a joint venture company owned by De Beers and the government.
De Beers, 45% owned by mining group Anglo American, tightly controls distribution of its diamonds to specially-selected clients.
Botswana, along with other Southern African diamond producers South Africa and Namibia, have put heavy pressure on De Beers to help them forge downstream diamond industries.
They want to move up the supply chain: the value of global rough diamond production of $12-billion surges to around $65-billion by the time it is sold in shops as jewellery.
Botswana enjoyed particularly strong leverage during recent negotiations to renew mining licences because the world’s biggest producer of quality diamonds accounts for about two-thirds of De Beers’ total output.
In a ground-breaking deal reached in May, De Beers agreed to transfer its diamond-mixing operations — the mixing of diamonds into assortments — to Gaborone from London by 2009 and create a marketing unit to supply rough diamonds to local cutters.
De Beers had long argued that it doesn’t make economic sense to polish diamonds in Southern Africa, where costs are many times higher per carat than in the main cutting centres in China and India.
But the diamond giant relented when the government, struggling to cut an unemployment rate of 24%, made clear establishing a local cutting industry was a key priority.
Diamond cutting costs $12 to $25 per carat in India, $20 and $30 in China, but $60-$65 in Botswana, says Kettle, who heads the Botswana unit of De Beers’ marketing arm, the Diamond Trading Company.
Companies like Belgium’s Eurostar, which set up in Botswana last year, agreed to forgo some profits to gain supply in a sector where new mines are scarce and ensuring a steady stream of top quality diamonds is difficult.
”Everybody recognises that the profitability will be less than in India or China, but it’s a strategic choice to secure supply,” Kettle said.
Most factories due to set up shop in Botswana plan to polish more valuable larger stones here to lessen the effect of the higher cutting costs on margins.
Eurostar is one of only four cutting factories in Botswana, but 11 others have been awarded licences and are due to open within the next two years.
”We have 180 employees, but our intention is to expand to 600 by 2008. The maximum we can have at our new factory will be 1 100,” said the factory’s general manager, Izak Engelbrecht.
Eurostar, which has cutting operations with 4 500 workers in China, uses a computerised reward system to lift productivity.
”We use the same system here as in China … you must have discipline, that’s very important,” Engelbrecht said, standing in front of rows of workers bent low over cutting benches.
The factory has a computer touch-screen on the shop floor allowing all employees to check on their own productivity and progress towards earning an array of bonuses each month.
Moitsheki (33) who was unemployed for five years after losing her job as a cashier at a supermarket, was grateful to be accepted on Eurostar’s training programme.
”At first it was a bit difficult, you need a lot of concentration,” she said.
Her trainer, Mothusi Keabetswe, joined Eurostar last year after switching jobs from a car parts firm.
”Ever since I was a boy, I was always fascinated by diamonds. I always wanted to know about them,” he said. – Reuters