How Independent Will Botswana Get?

Botswana became independent in 1966. But at this year’s JCK show in Las Vegas, the country—or at least the diamond part of it—seemed to be declaring its independence for a second time. Not only did the world’s leading diamond producer have a tourism-promoting booth at the show (which, suffice it to say, doesn’t get lot of booths devoted to tourism), its minister of minerals, energy, and water resources, Onkokame Kitso Mokaila, was quite visible, accepting an award at the Diamond Empowerment Fund dinner on behalf of his country’s president and delivering a short speech at the Rapaport breakfast. 

Following his talk, Mokaila spoke with JCK about why his country decided to be so visible, its future with De Beers, and if Botswana will ever brand itself.

JCK: What are your goals coming to this show? 

Onkokame Kitso Mokaila: One, was exposure of what Botswana is. Two, was to reassure the world, especially the American market, that we are going to continue to be a supplier for a long time. Three, was the opportunity for saying we are willing to have a different conversation to what we have right now. What we have is not necessarily cast in stone. But it is about [talking with] any jeweler, or anybody really, who can come with a value proposition that makes sense for themselves or ourselves.

JCK: And what role did the booth play? 

Mokaila: The booth is basically saying, “We are here,” and you should get to know a bit more about Botswana. We are trying to link diamonds and tourism. We now know that in future we should have a bigger booth and do bigger things to really sell ourselves.

JCK: You are talking about luring jewelry manufacturers in Botswana. 

Mokaila: The idea is cutting and polishing is not the end of the diamond pipeline. We are realistic that we will never cut and polish and manufacture jewelry for all the rough that we offer the world. But we must make those steps to go in the right way. 

JCK: Do you think there is a disconnect between the producers and the consuming markets? 

Mokaila: As a producer, obviously, we have a long partnership with De Beers, and De Beers has basically been our way of taking our diamonds to market. We created our company, Okavango Diamond Company, to learn how to bridge that very gap you are talking about. That gap can only be bridged by understanding what the end user wants, what we as a producer want, and trying to find out what works for both of us. Basically, by eliminating the middleman. 

…If you listen to what Martin [Rapaport] was saying, he said it looks like the producers want to drive the price higher, while the end of the chain, the retailers, are saying the price is too high. One of the biggest risks is, you don’t want to price yourself out of the market. Therefore, bridging that gap is important for that understanding. 

JCK: Do you think there is also a gap regarding social issues and U.S. attempts for a chain of custody?

Mokaila: I think the level of conversation has not been at the right level. I think there is a lot of mistrust, but that is why I’m here and saying, “Let’s talk.” I think trust is a very important factor.

JCK: Regarding Okavango, by 2016 it will sell 15 percent of Debswana’s production. How is that sold, and could that ever increase? 

Mokaila: It is being sold via auction. Obviously, we want to develop our own price book with our own understanding looking at how the auctions are going. Our next discussion with De Beers about our sales agreement will determine how much Okavango will get. If we feel are ready and we are getting there, we may demand more. Actually, it says in the sales agreement that if we don’t get agreement, Okavango will automatically get 25 percent. But any agreement is dependent on the supplier and De Beers coming to agreement on something. If we feel we can get more, we will obviously ask for more. But it is also about the balance. We are also mindful of the fact that De Beers brings a lot of experience, about technology, about the fight against synthetics, and the technology that comes with that—it has penetration that is second to note. So that is the other side that one has to understand. 

JCK: Does the current De Beers deal work for the country?

Mokaila: So far it is working for us, but it can always be better. 

JCK: There was also talk of a BotswanaMark, kind of like CanadaMark.

Mokaila: I think it’s a possibility.

JCK: How would that be marketed?

Mokaila: Okavango would be best. De Beers has its identity. Okavango will have an identity of its own. 

JCK: We still hear a lot of mixed things about the profitability of Botswana cutting factories.

Mokaila: We hear the same thing. But they still stay in business. So hearing and believing what is true is a difficulty. But each individual company would have to talk about what it sees as the hindrance to its success.

JCK News Director