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    Start with a Diamond
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    Aug 06

    untitled-157.pngLocated in the center of southern Africa, the nation of Botswana has become one of the most successful and stable nations on the continent. Bordered on the west by Namibia, to the south and east by South Africa and to the east and north by Zimbabwe, Botswana, much like its neighbors of South Africa and Namibia, owes much of its growth to the diamond industry. Until recently, Botswana had only earned income through diamond mining, sending off the rough stones primarily to London, China and India for processing. However, with an eye towards building an even more solid infrastructure while creating more civil development, Botswana, in cooperation with DeBeers, has recently opened its own in-country diamond processing plants.

    These new diamond processing plants will process more than just the diamonds that are mined in Botswana’s diamond mines. The state-of-the-art plants will receive rough diamonds from diamond mines located throughout the world. This will put them in direct competition with the diamond processing plants that are currently operating in China and India. In the world of diamond processing, China and India have taken the lead, as their low-cost operations are presently conducting the majority of the world’s diamond processing.

    Botswana, in association with DeBeers, is hoping to gain a large foothold in the diamond processing field. The new plants are not just seeking to take over the fields of diamond sorting and processing, but the actual marketing of diamonds as well. The marketing of diamonds from many of the world’s diamond mines, particularly those of DeBeers in Africa, had been sent to London for the final sorting and marketing for the diamond bursars in Belgium and the Netherlands. However, the current diamond processing plants are aimed at locating the entire diamond operation in one country, thus eliminating numerous shipping and processing steps.

    Botswana owes much of its growth to the large supply of diamond reserves it holds within its borders. It has been calculated that diamonds are responsible for upwards of 80% of Botswana’s income from exports to foreign countries. Despite this incredible revenue source, the fact that diamonds are not an infinite resource is not lost on the Botswana government. It is with this understanding in mind that they chose to sign into a cooperative agreement with DeBeers, so as to not only create new income in the current diamond reserve situation, but to have the structure in place to continue to profit on the diamond industry even when the time comes that Botswana’s diamond reserves begin to be exhausted.

    The forward thinking of Botswana is greatly due to its long-standing stable government. With such a solid political climate, the government has been able to look into long-term planning for the nation, rather than have to answer to wildly changing political and economic situations, a state that is often typical in less stable governments. Botswana has been hailed as the most corruption-free nation in Africa by the international corruption observation group, Transparency International, and it is this public acclimation along with Botswana’s forty-two year old, stable, multi-party democracy that makes Botswana such an attractive investment for foreign investors such as DeBeers.

    The current diamond processing plants will not only help Botswana to continue its present overall economic growth, but it has helped to continue the infrastructural development of roads, schools, hospitals and stable employment. The new diamond plants are estimated to have created over 3,000 new jobs in Botswana’s diamond industry alone. This does not include any additional ancillary jobs that are created around industrial growth.

    In addition to this development, the future of Botswana is looking ever sounder, as the diversification of the diamond industry within Botswana creates high skilled jobs for domestic workers. This new employment situation indicates a future labor force of Botswana nationals with a highly technical skill set. In short, the decision of the Botswana government to deeply invest in the infrastructure of their domestic diamond industry through the building of diamond processing plants gives a strong indication of a bright future for Botswana, even when their own diamond reserves begin to tail off decades from now.

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