Does De Beers really have a future in Botswana?


In my blog last week, I closed with two questions: What is De Beers’ long-term plan, and will its parent company, Anglo American, continue to have an interest in supporting a small, declining part of its business?
Any answer is speculative by nature, as we have no particular entree into Anglo’s corporate thinking. But we can make some fair assumptions.

De Beers’ business can be divided into mining operations, and its sales and marketing side. Let’s focus on the latter. It is clear that De Beers has fully committed to making Botswana its operational center for sales. There is not even a glimmer of a suggestion that other, better-suited cities could be considered.

Botswana, as we noted last week, is difficult to access, has a poor business infrastructure, and lacks the ability to rapidly build one that can attract expats in large numbers. A parallel would be Dubai, which possesses a huge cash cow in natural gas and oil, and very aggressively built a major trading and financial center. It can be said safely that Botswana does not have the resources or the drive to replicate a comparable transformation.

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Source JCKonline

By Ben Janowski*, president, The Janos Group Ltd.

*Special guest blogger Ben Janowski, a longtime diamond industry consultant and occasional JCK contributor, helms the Cutting Remarks blog while Rob Bates is on leave.