MAUN (miningweekly.com) – There had long been a desire to diversify Botswana's economy beyond its dependence on diamond mining and although some progress had been made in achieving this goal, the country remained vulnerable to shifts in the global diamond market, diversified mining major Anglo American CEO Mark Cutifani said on Monday.

He was speaking at the thirteenth Confederation of Commerce, Industry and Manpower. The theme of the conference was 'Opening Botswana to the world: Attracting foreign direct investment (FDI) and ensuring that Botswana's firms can compete in the global economy'.

“It is understandable that [Botswana’s] leadership would like to make more progress towards having a more vibrant manufacturing, services and export economy,” said Cutifani.

He added that three key ingredients were needed to drive the depth and breadth of the country's primary growth path – it had to leverage its natural resources to build the economy, continue to focus on sound policy frameworks and develop and include all of society in its growth plans.

Botswana, he commented, was in the fortunate position to have mineral endowment and, contrary to some other developing nations, had used it well. 

“Mineral resources are like any other natural resource, you can either use them well, or squander your endowment through short-sighted and inadequate policy frameworks and approaches. Anglo American stands ready to partner with the government of Botswana in evaluating the economic viability of natural resource projects across a range of commodities,” he said.

He added that Anglo American understood that resource development was a partnership that must benefit society in its broader context to avoid a resource blessing becoming a resource curse.

Cutifani stressed that diversification beyond extractives, in general, and diamonds, in particular, was crucial, as proven resources would eventually be depleted. 

EDUCATION AND TRAINING
While already successful in attracting diamond grading expertise and research activities, Botswana would need to generate other economic activity in the short term, as the real long-term value would lie in retaining the intellectual property generated by attracting the world’s young, high-potential talent, and a highly skilled workforce to the country, he further noted.

“Examples provided by countries where practical and transferable skills are rewarded and respected in society, at least as much as a traditional modern academic education, are worth studying and emulating,” he stated.

Cutifani commented that Anglo American was proud to sponsor the Bokamoso programme, in partnership with the Ministry of Education, which identified talented Batswana graduates and seconded them to Anglo American’s operations for a period of two years. 

“We are confident that this initiative will bare fruit both for the government of Botswana and Anglo American over the longer term,” he said.

Meanwhile, Botswana President Ian Khama said the Southern African country had become a top destination for global investment and that it would continue to attract FDI, which would help create permanent skilled jobs and boost the country's economy.

“Botswana has a lot of catching up to do, owing to the most recent global recession. The eradication of poverty, improving the healthcare system, youth empowerment and water and electricity security are top government priorities,” he highlighted, adding that it was imperative for the country to improve its economic growth.

DIAMOND REPORT
Anglo American subsidiary De Beers earlier this year released its inaugural diamond insight report, detailing its perspectives on the diamond industry from exploration to retail.

De Beers Group CEO Philippe Mellier on Monday said that, as the diamond industry evolved to respond to recent consumer trends and macroeconomic realities, there were new and surprising answers to questions regarding the outlook of the diamond industry.

“In contrast with precious metals, the diamond industry derives practically all its value from consumer demand for diamond jewellery and the outlook for the industry is linked to consumer demand. Even under scenarios of volatile or weaker global economic growth, demand for diamonds is expected to show positive real growth in the next decade," he pointed out.

According to the report, global diamond jewellery sales were $79-billion last year, up 3% from the year before.

De Beers believed that investment in branding, marketing and retail standards would help ensure that consumers did not drift away from the diamond category in favour of competing categories such as travel, coloured stones, electronic accessories or designer fashion.