Value Adding and Beneficiation: Lessons learned from De Beers - Panel Discussion

If I haven't met you already, my name is Alex Vines and I'm Director of Area Studies and International Law at Chatham House. I'm one of your hosts today. We've kept one of the strongest sessions for you for this panel here, for after lunch, so that we can have a good debate. This session is on value-adding and beneficiation: lessons learned from De Beers. It's a panel discussion and, like everything else in this conference, is on the record, so it's not under the Chatham House Rule. What we're planning is to have presentations by each of the panelists and then we'll open up for Q&A and clarification. So first of all I'd like to introduce to you Paul Rowley, who's the Executive Vice President Global Sightholder Sales of the De Beers Group. He was previously the Senior Vice President at Operations Midstream, where he oversaw the preparations for the migration of sales functions from London to Gaborone, and was Acting Managing Director and Executive Director of the Diamond Trading Company in Botswana. So I can't think of anyone more appropriate to talk about this process and what the lessons learned are, and indeed what are the lessons beyond Botswana of that beneficiation exercise, than from Paul. So Paul, if you'd like to come up, you're very welcome.

Paul, thank you very much for kicking us off. Our next panelist is Jacob Thamage, the coordinator of the Botswana Diamond Hub. I'm very pleased to be back in Gaborone so that I can see Jacob again—it's been a while since I saw him in action. He leads the development of diamond beneficiation and related processing activities in Botswana as the coordinator of the Botswana Diamond Hub. Prior to that, he held several positions in Botswana's Ministry of Minerals, Energy and Water Resources, including working as Chief Mining Engineer, the Director of Mineral Affairs, and the Director of Mine Operations and Deputy Permanent Secretary. It was in that capacity I met Jacob for the first time and was most impressed by his professionalism and his vision. So I'm looking forward, Jacob, to hearing you on what you think are the lessons learned from De Beers for value adding and beneficiation. Thank you very much.

Good afternoon everyone. I'm not sure I can speak about the lessons learned from De Beers. I will, however, attempt to indicate where, as Botswana, we've come from in terms of the issues around value addition and indeed beneficiation, as Paul has mentioned. In most countries, you find that they have a mineral policy. In Canada, it's about 300 pages. In Namibia, it's 45 pages. In Botswana, we don't have that. We are actually working—my colleagues who are in this room—they are working on a document that would represent a mineral development policy as is often seen in other parts of the world. This does not, however, mean that we have been working in a vacuum. What the country has done years back was to synthesize into about five principles the mineral policies of this country. The first one being a desire to maximize economic benefits for the nation while enabling the private sector investor to earn a competitive return. The second principle, which has guided us and which is relevant to this, was to encourage the linkages with the rest of the economy for value addition, or to expand value addition. The third principle is to create a competitive environment to stimulate private sector investment in exploration and mining. The fourth is to generate employment and training opportunities for the citizens of this country. Last but not least, it's to do all these activities with proper safeguard to the environment. This is what has guided us as a country, and this is what has guided us way back. If you go back into our document and look at the NDP—those who know—you will find these written like I've just said. So value addition has been with Botswana for a very long time. Indeed, when you look at the diamond industry, the first factory that opened in this country was in 1981 in Broadhurst. Sadly, it has closed early this year, but that's how far we have come. Then the second set of factories opened—one in Molepolole, one in Letlhakane—deliberately to try and address employment creation in the rural areas. Sadly, this Molepolole factory has also closed towards the end of last year. We've moved on. By 2004, we had about four factories—two in Gaborone, and others in the rural areas. By 2006, 12 more new factories, bringing that to 16, all in Gaborone. By 2010, we moved to about 20 or 21. We have measured in terms of success. We used employment as a measure. We used the value of diamonds cut and polished in the country as another measure. We've used investment in the industry as a measure of where we are going. When one looks at 2004, we had about 570 people in this industry. By 2013, which was a peak, we had about 3,800—just under 4,000. The figures have since subsided due to the challenges that we are experiencing. The value of diamonds made available for cutting and polishing—in 2010, we had about 400 to 480 million. By the end of last year, we had about 936 million, just under a billion, worth of diamonds made available for cutting in this country. Investment in the sector from 2008 to about last year was well in excess of 100 million dollars. So what have we learned, or what have been the challenges? We're going back to the linkages, because we expected that by having cutting and polishing in the country, we would see linkages developing. Finance has been mentioned—we have seen certain diamond financing banks set up here, albeit one of them has since left. But we have two new diamond-specific banks in the country. Local banking has also taken some interest in funding this industry, and we are excited about that. We've seen security and logistics firms setting up here. What has been a bit sluggish, and which we believe is crucial, is the supply chain—the establishment of equipment and other input suppliers to this industry. Our industry has depended on equipment coming from all over the world with no local supplier. This has put quite a lot of strain on the industry. It has meant carrying a lot more inventory of supplies than would normally be carried by competitors elsewhere who have the supply chain set up locally. This is something we have seen as a challenge. I'm still not sure what the tipping point is in terms of the level of cutting and polishing that has to work in a country for that supply chain to set up. In terms of learnings, we have seen that value addition is not necessarily an easy undertaking, especially given the prevailing challenges. We have seen and still experience challenges in terms of the ability of our citizens to get into this business. Citizen economic empowerment has been a very big challenge. This is a very cash-intensive business, and with the banks being more cautious in funding this industry, we find it's very difficult for our people to come in. We believe there's still no silver bullet. We just have to keep our noses to the grinding wheel, adjust and adapt our strategies to try and stay the course. I look forward to the discussions. Thank you.

Jacob, thanks very much for the presentation. Our next speaker began his career with Debswana in 1992 as a junior plant metallurgist. He's clearly a high flyer, because he is now the Managing Director of the Debswana Diamond Company. I'm very much looking forward to hearing your thoughts about beneficiation. Please come here.

Thanks so much. I think the other speakers are very connected with the beneficiation mechanics and how it all happened, but I'm going to take a different line—a line that is lessons around adding value through human resource development. I think the minister this morning made a statement when he was asked what he believes is the one thing that would lead to the growth of the economy going forward. He said: our people. And the Resident Director of Debswana did mention a study that was done by Michael Porter in 2012 that alluded to a comment that Botswana's competitiveness is far lower than the prosperity indicators we see. So it's a prosperous economy because it's cash-flush with diamonds, but actually the competitiveness is very low. The question is: what do we lack? Do we lack human capacity, human ability? What do we lack? I'm just going to try and demonstrate that this partnership that De Beers and the Government of the Republic of Botswana went into very early on paved the way for the development of human gems that we have. I'm just going to take you through a few statistics to demonstrate. Pre-independence, at independence, the educational infrastructure in this country was minimal to absolutely non-existent—that's fact. The human capital was also grossly underdeveloped—that's fact. It is estimated that in 1966, there were only about 40 university graduates and about 100 secondary school graduates in a population of 595,000 people. Records show that from 1960, there was only one doctor for every 48,000 people. This is good context to demonstrate what happened when the partnership was established from the vision of our forefathers. I always talk about this partnership with a lot of passion because it has transcended four presidents, and clearly there's something about it. What has it produced in terms of human capital? In the formative years of this partnership, there was a general agreement that human capital development must be an imperative. I think it's a big tick that this relationship in its initial years decided to do that. In 1969, this company sponsored the first four students to obtain technical skills appropriate to the mining industry. That was the start of a major human capital development program—small, humble beginnings. But this company and the partnership initiated this. To date, this program boasts over a thousand graduates, some of whom now hold leadership positions in government, in business, and in society. I'm sure in this room many can raise their hands and demonstrate that in fact they have gone through the scholarship program that Debswana established during those early days. I'm one of those people that stand today as the chief executive of the company. So there is a a lot that happened in those days. These graduates span from doctors to catering to education, teachers—we literally sponsored everything. I think this partnership needs to be given recommendations for such foresight. Debswana also runs an apprenticeship training school at Orapa which dates back to 1973. By the end of 2014, over a thousand artisans had graduated from the Orapa Technical Training Centre in a variety of trades—I'm talking here from fitters to electricians, to machinists, boilermakers, heavy plant mechanics. For those of you who know mining, without these individuals you have no mining. These are the people who make it happen. We've become the source of labor in these trades to most of the mining companies that have been starting lately in the country. What a partnership—I think it's important that that needs to be noted. In 2014, the Minister of Education and Skills Development adopted the Orapa Training Centre's artisan training curriculum. This is now the government saying we need what Orapa did in 1973 to be piloted in our government technical colleges. As I speak, two colleges are piloting this, and it's to be extended nationwide. Imagine what will happen if this is extended nationwide—it means our colleges can now produce skills that are suitable for the industry for the first time, because we do not have government technologists supplying the mining industry now due to what we deem to be not the appropriate skills we need. The Botswana Accountancy College, which is now running a very successful college in the country, was a successful joint venture between the government through the Minister of Finance and Debswana. The college was the brainchild of Debswana in the late 1980s through the Debswana Accounting Training Centre. A lot of the accountants you see in the country today came out of this vision that was born early on. So human capital development, which has gone through different stages, is a legacy that this partnership is proud and must be proud of leaving behind post-diamond mining in this country. I will not conclude my message without linking this to technology transfer. Aligned to human capital development has been technology transfer through this partnership. Botswana has acquired world-class skills in managing cutting-edge technologies in open-cast mining, recovery, sorting, and processing. We have adopted and deployed De Beers proprietary technologies in sorting and polishing, especially recovery and sorting at our mines. We know about the aquarium technologies which were state-of-the-art, and as we implemented them in those days, today many of our citizens are now managing, operating, and maintaining these technologies. So the skill base has been widened. With the cutting and polishing industry now with us, this is bringing a unique set of skills and technologies that is going to help this economy grow and improve our knowledge and skills. As I conclude, it means the following: as a country, we're well poised now to become a mining services provider and a mining knowledge economy in the SADC region, if not the rest of Africa, thanks to mining—in particular diamond mining—which this partnership must take credit for. I think we're ready to take mining into Africa, to take the knowledge we've acquired over many years through this partnership into the rest of SADC. I'm looking forward to more constructive engagements during the rest of these proceedings, and we can explore this subject and many other subjects much more. Thank you very much.

Thank you very much, and indeed we're almost at the moment for more constructive engagement with Q&A. But first of all, we have Maria da Silva, who is a Senior Policy Analyst at the South Africa Chamber of Mines, an advocacy organization representing the mining sector. Maria also, for your information, was a Deputy Director of South Africa's Department of Trade and Industry, where she focused on strategies to promote South African jewellery manufacturing as part of the department's broader initiative on industrial development. So some key insights there I think for this discussion. Maria, if you'd like to come up and give us your remarks, thank you very much.

Good afternoon, ladies and gentlemen. My very brief talk will really be from the perspective of South Africa, and in terms of the lessons learned from De Beers, I would like to draw some points to the differences perhaps between what has been accomplished in Botswana versus what has or has not been accomplished in South Africa. As we're all well aware, the diamond industry is currently facing enormous challenges stemming from a combination of factors that have impacted the industry and threatened to undermine confidence at all levels of the sector, from manufacturer to the consumer. Among the issues the industry has to deal with: shrinking profit margins, mainly in the midstream of the diamond pipeline; difficulty in obtaining bank financing, particularly among manufacturers and polished wholesalers; high prices of rough diamonds; accumulating inventories; decreasing demand for polished diamonds; and declining polished diamond sales. To deal with these challenges, we need to adopt an approach of greater cooperation among industry players and other stakeholders. One of the themes at the recent Diamond Indaba in Johannesburg on positioning South Africa as the heartbeat of diamond beneficiation was for a partnership involving government, labor, and business. Such a partnership is sorely lacking in the country, and it is therefore of little surprise that the cutting industry in South Africa has declined from over 4,000 participants in the early 2000s to just over 300 people currently. This figure will drop to a mere 200 when one of the major cutting and polishing factories in the country closes its doors next year. The decline in beneficiation in South Africa is in sharp contrast to Botswana, which employs a few thousand people in cutting and polishing factories and has two and a half times the number of sightholders that are resident in South Africa. This success is largely attributable to the partnership between De Beers and government, which has led to the creation of an enabling environment that allows the industry to thrive. It is such an enabling environment that is missing in South Africa. The introduction of amended diamond sector legislation in 2006 has largely contributed to the downfall of diamond beneficiation in the country. The State Diamond Trader that was created to ensure an equitable and consistent supply of diamonds to bolster the cutting and polishing industry has not succeeded in its mandate. Manufacturers complain that there is little cooperation between the dominant Precious Metals Regulator and the industry, and there is no representation of diamond manufacturers in the established government diamond structures. Added to the problems of governance and legislation not in sync with the needs of the diamond manufacturing industry are the high labor costs in the country compared to productivity, outdated equipment, and shortage of skills. To reverse the situation, the government will need to facilitate conditions for the industry along the lines of Dubai and Israel in terms of tax incentives, and also India, in encouraging the country's banks to provide credit. Without attractive incentives, global diamond beneficiators will not be enticed to set up business in South Africa, and relevant funding is crucial for new and emerging entrants. There are some positive developments that may yet resuscitate the cutting and polishing industry in South Africa. One of them being the proposed establishment by the government of an Industrial Development Zone adjacent to the O.R. Tambo International Airport. This is expected to offer reduced corporate tax and possible exemptions from value-added tax and import tax on equipment brought in by tenants operating within the area. The proposed IDZ has long been on the cards, however, and if it is going to turn around diamond beneficiation in the country, it needs to materialize soon. Another initiative that should boost beneficiation and also address the problem of aging diamond cutters in South Africa is De Beers' initiative to nurture historically disadvantaged black entrepreneurs to become future sightholders. This will also go a long way to transforming the industry, which to date is not representative of the demographics in the country. If the project has the backing and participation of government, then it will be a fine example of a partnership that can change the trajectory of the local beneficiation industry from decline to growth. Thank you very much.

Thank you, panelists, for your opening presentations. We have about 15 to 20 minutes now for a debate, discussion, questions. So I'd like to invite you in the audience to be provocative—it's after lunch, this is your chance. So can I have a microphone right down in the front, please?

Yes, I suppose you have already introduced me. I'm Sheila, and I wear many hats, but I speak now from the perspective of the African Development Bank. I have both a comment and a question. First, a comment to the presentations, which I agree with fully. The comment is this: it seems to me that we did very well in skills development in mining. You didn't speak so much about sorting and valuing, but you know of course that we did also very well through DTC, through the CSO days, right up to recent.

But I think that there's a gap in the cutting and polishing. We spoke this morning about youth and the expectation for employment. I'm not sure we're going to achieve this if the government, which is the custodian of education, does not invest in training people in skills in cutting and polishing. I don't know that we will achieve competitiveness and be able to drive the cost of labor down if in fact we leave it entirely to the cutting and polishing firms to do it for themselves. I wanted to get a view from you of how, as a country, after 40 years we don't have one school in cutting and polishing, but somehow we think we can crack beneficiation, at least from an employment perspective. The second question I wanted to ask the lady from the Chamber of Mines in South Africa — I mean, we have a static diamond footprint. We have Botswana, we have South Africa, we have Namibia, we have Angola. Do you see any logic at all in each one of these countries disaggregating itself and saying we will have our own beneficiation policy here, and essentially diminishing what I think is inherently a much bigger stock if we take a much more regional view? What are you saying to your members, what are you saying to your constituents in South Africa about competing with Botswana and Botswana competing with Namibia and Namibia competing with Angola in the space of diamond beneficiation? It seems to me the economics of it are fundamentally flawed.

Excellent questions. The lady just behind — Sheila, please do introduce yourself, you're most welcome.

Good afternoon. My name is Malibu Rompoga. I work for DBS as head of HR. I just wanted to ask, Ray Tamera, on the beneficiation side — I think you shared a lot around some of the achievements if we date back to 2004, but my interest is more in terms of long term. I just want to get an appreciation of what's the long-term view around how we can ensure that there's sustainable beneficiation, because I do recognize, I think one of the statistics that you shared with us is with regard to youth employment, and the reality is we are actually seeing that we are getting quite a number of retrenchments and people losing jobs. So clearly the solutions that we used in the past cannot sustain us to be able to ensure that there's a step change around sustainable beneficiation. Just share some insights on the long-term view. Thank you.

Equally excellent question, thank you so much. And let's get some gender balance, gentlemen, right in the corner there.

Thank you. My name is Vikram Telis and I'm with Bonas Botswana. My question is really aimed at Jacob. Jacob, could you tell me what the mandate of Okavango Diamonds is? And when talking about value addition and beneficiation benefits from Okavango Diamonds, how has that gone beyond and above what De Beers are doing in Botswana? Thank you very much.

Okay, we have a question from someone who's watching the live stream who's tweeted in, and this is for Jacob from Abby Kravitz from Rapaport. He said that you mentioned that the number of people employed in the industry declined from 2013, but he wants to know how many people are employed in the industry in 2015. Thank you very much. Let's hold any other questions. So Jacob, you've got two questions — one's about the mandate and one's about figures. Would you like to answer them?

No, just sit down, it'll be easier for all of us. Yes, I think I could also attempt the one from Sheila about training in the cutting and polishing. Yes, one of the things that we have done when we started here with the cutting and polishing was to realize exactly that we don't have people that are trained in this. The way we try to get around that is to try and make it easy for the expatriates who would come in and be trainers of trainers in the various factories — that is ongoing. The challenge is that a lot of these factories, they prefer to train and mold people so that they start with the culture that they want. We find that many of these people, it's not necessarily easily transferable from one factory to another. So for some reason the factories still appear to be preferring their own in-house training. We have had conversations with the Indian Diamond Institute that we're going to set up here — we've had conversation with them since 2009, we've had an MOU signed. That was an area where we were going to set up in Orapa and have that training with the institute, or in India. We have not yet given up; it's an area that we will look at so that they can come and set up and assist us here. Quickly moving along — the long-term sustainability of beneficiation. When we started beneficiation, I think we focused so much on creating jobs. The feeling now is that we should really, if we are to go for sustainability, we should allow the industry to employ the best methods, and one of those is automation. If the industry goes for automation, that is an area where there is a possibility for sustainability. Now when you have automation, as Paul said, you need a different set of skills. It's not saying you don't need people — you need a different set of skills. Somebody who used to fix a typewriter cannot fix a computer. So the equipment that they are using is much more sophisticated. It will help with skills that could actually also be transferable — not just from one factory to another, but even from one industry to another. Somebody who fixes these machines can go and fix a laser machine elsewhere outside the diamond cutting and polishing industry. So that's the way we see automation leading to a bit more sustainability. It's also a question of perhaps the sizes of diamonds going maybe moving towards the bigger sizes — that's less people, but it's where concentration of IT would become very useful. The mandate of ODC — let me also say, one of the things that happened which was a pleasant surprise for the factories that started here was the speed at which our people were able to pick up the cutting and polishing of diamonds. People that had not seen a diamond, six months later they were able to produce very close to what is called triplex in the language of the industry. So the speed with which our people have picked this up is very, very amazing. The challenge of productivity — it's a different story. Yes, we do have productivity here and there. One of the factories, what they did — they got some of their best performers, took them to India. When they got there, they found that they were at the bottom of the heap, but they were able to very quickly learn and realize when they came back that being best here, they're not among the best in India. That competition is what competition is about, and it's been very, very useful learning for those individuals. ODC mandate — simply price discovery. When we started ODC, it was really about price discovery, because for many years, 40 years plus, we've been selling diamonds but we depended solely on my colleague here in terms of prices. So that really, for a start, that's really what all this is about. Question from Rapaport — 2015: currently we're looking at just over 2,000 jobs. We've unfortunately lost almost half of the jobs, but I believe this is a phase that we will go forward. Thanks.

Thanks very much, Jacob. Maria, we had Sheila's question to you directly about the regional approach — why does everybody need their own cutting and polishing? Why can't you regionalize it?

That I think is a really important question, and in terms of the theme of cooperating all along, it would make perfect sense to have that. The thing is, it would need a very, very concerted effort among the SADC countries to really make that a priority, something they want to accomplish, to join forces and to have a unified set of policies in terms of the whole diamond industry and especially in manufacturing. I don't know that it will come to reality at any time soon, really, because each country's got to realize what it is that it wants, and often it can't even decide within its own borders, never mind across borders. But the potential is there. We've just discussed now about training. In South Africa, there is a diamond training school, the Harry Oppenheimer Diamond Trading School, and I'm sure it's working under capacity. So there would be a way of training for not only entrepreneurs within South Africa's borders but beyond that as well, because we're not that far away. So that is an area that I think should definitely be looked at and that governments should discuss, because it isn't something that cannot be achievable in the short term. Thank you.

Thank you. Felici, do you have anything to add about the sustainability — the long-term sustainability of beneficiation? You want me to make a comment on that? If you'd like to, otherwise I'll ask Paul if he wants to.

Sustainability of the beneficiation — I think we're going to take the lessons we've already accumulated within the diamond space and start replicating similar to some of the core minerals we've been exploiting for a long time, the area of copper, nickel, and see what is possible, what's the art of the possible in that space. And I know that there is work and there's progress in that space. I think the question of is it going to be sustainable — as well, because I think it's going to be sustainable, we need to build a core capability, competence in the country for beneficiating our minerals. And I think it needs to be looked at in an integrated way, rather than just look at diamonds and look at copper — look at that, bring it all together, and see what the art of the possible is. That'll be my comment.

Thank you, Paul.

Thank you, thank you very much. Let's take one more round of questions if there are. Let's see who's been tweeting us questions.

So it's another question from Twitter from Rocky Gotham, and he's asked — we can't hear, can you speak up — Rocky Gotham has asked: has the relocation achieved its objectives, and if not, what are the challenges? That's one question.

And the gentleman here — I think mine is addressed to Ray Tamera. The first one: the Mines and Minerals Act — do we think the act as is promulgated now, is it supportive for industrialization within the mining and minerals sphere? And would you say the Industrial Development Act is strong enough also to support the beneficiary? And maybe the last one, to arrest the lack of participation of Botswana generally in the mining sector, particularly now that DBS has sold to Anglo American, and we hear that there is a restructuring of the mining sector in South Africa — are we not likely to have the big brother take over all the downstream and other peripheral outsourcing that could be done by a Vast one, and therefore lock Botswana out of the mining sector where we could be participating?

Good afternoon. My name is Vijay Kalyan Rahman from Grant Thornton Botswana. Mine is just a comment on to Sheila Kama's point on training initiatives. Just to add on to what Ray Tamera is mentioning, from a private sector perspective, we're aware that there are training sessions which are being planned by Botho University, which is specifically focused on cutting and polishing courses, and we as Grant Thornton have been facilitating in a small way in terms of connecting them with the Sightholders in terms of making sure that the course content is relevant and will be accepted. There have been challenges in the process, but I'm told that they're looking at commencing the training sometime by the first quarter of 2016, and it is right now with BQA for approval. So I thought I could just update that as such.

Okay, thank you for that addition. Gentlemen, right in the front here. Yeah, the gentleman with the lovely red tie, you sir.

Good afternoon. My name is Joshua Ferrari from Julius Land Diamonds. I think my question has been asked by the previous speaker, but I just want to phrase it differently. If I heard Maria correctly when she spoke about either some initiative involving the South African Chamber of Mines with DBS concerning the desire to bring in previously disadvantaged people into government beneficiation, and if that was the correct understanding — I was going to say to Paul that you spoke about the need to have an industry that is competitive, an industry that is sustainable, which is the aim of De Beers in Botswana as I understood it. But I was going to ask whether, in the same breath, isn't it appropriate for De Beers in Botswana to consider how they could bring the resources and connect them to the society of Botswana in the same manner as envisaged in South Africa?

Thank you very much. We have a question here just down here. Please introduce yourselves, only because we've got people who are live streaming who won't necessarily know who you are, so if you can just introduce yourself.

Thank you, Chairman. Again, Mr. Bonyongo. You have just done the brilliant exposition of the thrusts of the partnership and what the partnership has achieved — brilliant, but that is history. Would you like to venture on what institutional arrangements should we now put in place that can achieve almost an equivalent of what we have done before, with particular reference to diamonds, but looking at the dynamics now of more minerals, for the benefit of beneficiation if you will, and also connecting resources and society? Thank you.

Very succinct question. Okay, there are two more and then we'll close. So, yeah, Ross, do introduce yourself — three more and then we'll close. Ross, tell us who you are.

Ross Harvey, South African Institute of International Affairs. My question is general, but: are we not focusing too much on downstream beneficiation? Is there not opportunity both upstream and horizontally that Botswana should be looking at, especially in regional terms? Could it, for instance, become a new hub of upstream expertise, and are we missing the boat? Thanks.

Thanks, Ross. There's a lady there, and then we'll go for the gentleman to my far left, and that's it.

Thank you. My name is Lingo Matlabani from the Brandes Foundation. My question is just adding on to Mr. Kadiquilla's question, and it is for Mr. Bonyongo. You mentioned creating a mining knowledge economy, and maybe you could flesh this out a bit — what are the strategies in place, what's the implementation process, are there any areas of specialization that Botswana could potentially focus on? Thank you.

Thank you, another good question. And the final word — the question to the gentleman.

Jacob, it's Vikram again from Bonas Botswana. You mentioned that price discovery was the mandate for Okavango Diamond Company. If that's the case, then surely Okavango Diamond should be purchasing diamonds and selling diamonds on a very regular basis to make the best and fully appreciate the highs and lows of rough diamond distribution. Thank you very much.

So what I'm going to do is go down this panel, reverse order, and feel free to answer the questions you want to answer. So Maria da Silva, over to you first.

I would actually like to respond to the question that was raised on what arrangements can be put in place currently to deal with issues that are relevant now and not just look at past achievements. And I do think that some of the critical areas have already been raised and need to be implemented, and that is to do with training to start with. We heard about enterprise creation, but we also need specific training in the area of beneficiation so that we don't just have foreign manufacturers relocating to where they're close to the source of diamonds, but you've got your own local entrepreneurs. So that is a key area that needs to be addressed and which is within reach. And then within that as well is connecting trainees to established entrepreneurs and then connecting them to markets so that they're being sort of nurtured to not only cut and polish but then to be able to sell on. So those are areas that do need to be addressed immediately because they've got relevance now and also going into the future, and will very much also address the need of creating a local critical mass of entrepreneurs. I'm not sure if that answers the question, but if not, let me know. Thanks.

Thanks very much, Maria. Felici.

Thank you. These are very broad questions. Let me start with Botswana — whether Debswana will not abandon support to local firms, contractors, with all sorts of things happening around us, Anglo American coming in, and big brother crumbling — I think that's what you're saying. The one very assertive response to you is that no. In other words, we will continue to support local enterprise. In fact, if anything, we are intensifying our efforts to do so. And we have very clear policies for doing that. And there are examples right now that are live on the ground that we are doing so. In fact, I think as a company we've made it clear that going forward, even for sort of more intense-scale projects — not just simply supply projects, but projects that are much more meatier and bigger — we will start to look at capability of our citizen firms, whether they are locally based, mixed with people from outside, whichever combination, and give them projects in a very measured way under very controlled environments and allow them to grow. So it's an intention, and that intention I'm sure in due time it will become much clearer how that will be done at a bigger scale. Certainly some companies are benefiting already from that. Secondly, Debswana is encouraging the Botswana Chamber of Mines through its what is called the Business Development Forum to increase the supply base in-country for certain common things that we use as a mining industry, from BCL to Tati to ourselves, that those companies could re-establish here and produce from here to supply this country and forward into SADC. So we stand behind the Botswana Chamber of Mines in ensuring that that actually continues to improve. I hope that answers your question.

Thank you very much. Jacob.

Thank you. I think there was a question of whether the relocation has achieved its objectives, and yes, from where we stand, we think it has. We believe it has achieved its objectives and it continues to do so. Some of the areas where perhaps there's still a lot more work to be done — we had and we still hope that the tourism would pick up, because partly because of the location. It's an area that we continue to look at and would like to see perhaps more tourism picking up because of the Delta. But so far the location has achieved the objective for which it was set up. The Mines and Minerals Act — we do not believe that the act in any way inhibits industrialization. In fact, if you look at the Fraser Institute based in Canada, for years they've rated us as among the best. They do this annually. So we've not seen anything that inhibits industrialization in terms of that act.

Thank you. Paul.

Okay, there was a comment. Yeah, all right. Sorry, yep, please respond to the comment.

I think the point you're making is that the past does not necessarily mean that the solutions that we had will serve us well for the future, and that we do need to perhaps build on what the partnership has produced — human capital — and think forward. I agree totally, and I think that's why I spoke earlier about the mining knowledge services. I can safely say that we've built a lot of open-cast mining experience, we've built very solid ore processing, geotech, hydro — all sorts of experiences in the area of mining. And I think going forward, from a company strategy, from a country strategy point of view, I am submitting that as we go into Vision 2036 and beyond, we do need to look at the knowledge-based economy that this country must start setting itself up for, to service the rest of the world — not just Africa, actually. And that mining knowledge services can lead, and there has to be some lead here. I think we have the capacity and the capability, and they've demonstrated it. And as the mines come to an end, that end must yield a new source of income that is pretty much international, pretty much export, and I see that coming from mining knowledge services. How we structure that going into the future must be a subject of discussion at both policy and operational level. So I would want to leave it as such, but I think it's something that I hold a passion for, to participate in live debates around structuring something like this, and not fear perhaps feeling that it may never be accepted. I think that the DRCs and the Congos are waiting for us to lead, and I think we're leading in legislation — they're coming to copy that. There's more that we can offer. I'd rather leave it there. I hope I've answered you.

Palesi, Jacob, Paul, and Maria — thank you very much for encouraging a very robust debate and discussion here. So I think we've got food for thought and ideas in terms of moving ahead of how to add further value and harness beneficiation for diversification. So thank you to the panel and thank you to the audience. There's coffee now, so you're most welcome, and let's show the customary appreciation to the panel. Thank you very much.