Parliament didn't authorise purchase of shares in HB Antwerp

 

Botswana Parliament has not authorised any money to buy shares at HB Antwerp, Botswana Congress Party president, Dumelang Saleshando said this week.

Wading into the controversial debate on the protracted Sales Agreement negotiations between government and long-time partner DeBeers, Saleshando accused President Dr. Mokwgeetsi Masisi of portraying himself as “Young Robert Mugabe” to foreign investors. Launching HB Botswana, the local subsidiary of Belgian diamond outfit, HB Antwerp, early this year, President Masisi announced that Botswana would buy a 24 percent stake in HB Antwerp.

Saleshando likened Masisi to ‘Young Mugabe’ because of his handling of DeBeers, the biggest single investor the country has.

“Just imagine a small investor who wants to invest in Botswana and they realise how government is being disrespectful towards DeBeers, they will proceed with their investment,' Saleshando told Botswana Guardian in an interview.

Botswana and DeBeers have two types of contracts concerning the mining of diamonds at Orapa and Jwaneng mines. These are, Mining Lease Agreement which takes a period of 25 years and the Sales Agreement which is a 10-year agreement.

Originally the sales agreement was for a period of five years, but had to be increased to 10 as a way of appeasing DeBeers to agree to relocate the aggregation from London to Gaborone, as well as the establishment of the Diamond Trading Centre Botswana (DTCB). At the time DeBeers had asked for the agreement to be longer as a sign of goodwill.

The term of the last 10-year Sales Agreement expired a year ago. In this agreement the deal was for Botswana to take 25 percent of rough diamonds mined by Debswana to sell anywhere in the market. Now in the current negotiations, Botswana is asking for more.

Saleshando worries that there are certain things that are not clear in government’s handling of the current negotiations, including the HB Antwerp deal.

“For me part of the biggest problem is the continuation of the secrecy by Botswana government as the President has not told us who HP Antwerp is, where they come from and who valued it and how much the 24 percent purchase was.

“Parliament has not authorised any money to buy shares at HB Antwerp so the legacy of secrecy is continuing. If the president had the likes of Rio Tinto on the side-lines, I would understand.

“If he was opening up Botswana to all players and presenting the country's terms to see who would be willing to take up the deal on the basis of the presented terms,' he said, adding that BCP’s proposal as a way forward is for government to propose an extension of an extra six months.

When confronted with the fact that this has been done as the contract should have been signed a year ago, Saleshando responds: “I do not think given the magnitude at hand we cannot say there is pressure of time.'

He continued, 'Let us assume that we terminate the DeBeers contract at the end of this month. Can we get another player in July? No!'

The BCP certainly agrees with wanting more, but differs on issues of transparency. 'Our concern as BCP is that they are not telling us what they want to achieve by bringing in suspicious investors to partner with in the form of HB Antwerp.

“As much as we agree that somehow DeBeers gave Botswana a raw deal, our view is, as a company, they are not accountable to us the populace,” Saleshando said.

'We have our officers in the board; they have an obligation to inform us of what transpired. My view is, DeBeers like any private company focused on maximising its profits and Botswana’s strategic objectives of being a leader in the diamond industry were compromised.

“I am sure it makes business sense to cut and polish where there is cheap labour from a profit perspective. But it is not in our strategic goals to export jobs.

“Botswana government should have insisted long back that we will not agree to this. If anything the partnership with DeBeers should have been on how to develop skills in the next 25 years or so,' he said.

Saleshando accused President Masisi of claiming that his government wants more from the ongoing negotiations, but not being specific on sharing just how much more the country wants.

He said for the BCP, their first consideration would be to partner with DeBeers and ensure that the two parties understand each other.

'As BCP the more can be greater shareholding in DeBeers, increasing our stake so that we can control the strategic decisions of DeBeers.

“We believe that controlling the strategic decisions will grow our market beyond Botswana’s diamonds. Okavango Diamond Company (ODC) shares could be increased from 25 to 50 percent.

“In addition, our view is that in the event that ODC owns 50 percent, then how much of the 50 percent diamonds should be polished in Botswana?”

He said that mining of diamonds is done in two ways - extraction, which is capital intensive, while jobs are created in the cutting and polishing. He is convinced that this is where the focus and negotiation should be.

Saleshando is convinced that previous Presidents have been able to get more, citing the late Sir Ketumile Masire, who started the beneficiation process, even though in BCP’s view, it was at a very low level and lacked ambition.

President Festus Mogae also got more with the Botswana Diamond Trading Company (DTCB) setting up here.