A larger mining sector has been established in the country, making it the world’s number three in total minerals production

Blackie Marole, Managing Director of Debswana, the world’s biggest diamond producer by value, likes to go straight to the point: “Men and women need diamonds, they are part of their enjoyment of life”.

But the history of Debswana, and indeed the Republic of Botswana, one of Africa’s precious few gems of economic development, shows that those who need diamonds are not just a small group of big-spending fiancés. Here, the marriage of the ultimate in luxury to social progress has been unshakeable.

When geologists from neighbouring South Africa’s De Beers diamond company first arrived in 1955, the economy of the then Bechuanaland Protectorate relied wholly on agriculture and had little source of foreign exchange. One year later, still ten years before the Republic of Botswana came into existence, Debswana was founded as an equal-share joint venture between the government and De Beers.

De Beers now produces over 40 per cent of the world’s gem diamonds and is easily the largest foreign direct investor in Botswana. The role that the South African giant has played in Botswana’s development is hard to overstate: it would be true to say that Debswana's diamonds have almost single-handedly transformed a poverty-stricken republic into one of the world’s fastest growing democracies.

“It is a mutually beneficial joint venture ”says Sheila Khama, CEO of De Beers Botswana. “De Beers is committed to the sustainable development of the diamond industry in Botswana. Our knowledge and technology bring efficient operations that put bread on the table of Botswana’s citizens. In return it positions us as the world’s number one.”

Debswana’s revenues grew by 35 per cent to £1.35 billion in 2005, with its four mines producing 31.9 million carats. This accounted for 33 per cent of GDP, 75 per cent of Botswana’s foreign exchange and 60 per cent of government revenues. As the largest non-government employer in Botswana, the company champions responsibility, empowerment and job satisfaction among its employees. The company also provides workers with excellent safety, health and environment programs.

Diamonds have provided Botswana with funding for basic education along with the country’s virtually free healthcare service and highly progressive distribution of anti-retroviral drugs to HIV/AIDS sufferers. As Mr Marole puts it: ”The social development of Botswana, as we have it today, was built on diamonds. Without diamonds, there is no social development at all.”

It’s no surprise to find that Debswana has some challenges to continue performing at such heights. Many stem from the very success of the industry and the country’s reliance on diamond revenues. Mr Marole points to the need to focus on costs, with globalization bringing more competition, transparency and assurance of quality. In line with the government’s policy of economic diversification, the company is promoting added-value downstream diamond activities, such as cutting and polishing, which could add 3,000 jobs to the economy. Despite the stiff competition these activities face from countries like China and India, De Beers is supporting the initiative and will transfer its London diamond-mixing operations to Gaborone by 2009.

Blackie Marole Managing Director of Debswana

An absolute priority at Debswana is total transparency in all of its diamond mining and trading operations. This has attained special importance since the late nineties amidst concerns over the selling of “conflict diamonds” to finance wars in countries like Sierra Leone and Angola. The issue has gained wide media exposure, and will be the subject of Blood Diamond, a film about diamond smuggling in Sierra Leone starring Leonardo DiCaprio due to be released in December in the US and in January in the UK.

In 2002, the UN-backed Kimberley Process Certification System was established by a coalition of governments, non-governmental organizations and diamond industry companies. The members agreed to implement policies designed to eliminate trade in conflict diamonds, and the industry today estimates that over 99 per cent of the world’s total diamond trade is conflict-free. The fear of African diamonds being seen as tarnished by the negative publicity still worries the industry however, and the industry’s big punchers are preparing to fight back. De Beers is reportedly set to spend £8 million on a media campaign that will focus on the essential human benefits that diamonds bring to African countries.

Debswana, a full participant in the Kimberley process and a member of the World Diamond Council, remains proud of its involvement in 100 per cent conflict-free diamonds. “The point,” says Mr Marole, “is the good that can be accomplished with the earnings from natural resources. With good governance, transparency and careful leadership, commodities are a tremendous force for good.”