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De Beers speaks on Zim invitation to explore for diamonds again

24 december 2018

david_johnson_xx.pngDe Beers’ exploration team landed in Zimbabwe in 1993 and left in 2006, however, they first prospected for diamonds in Marange in the late 1990s. Harare, under the leadership of the then president Robert Mugabe, alleged that De Beers looted diamonds under the guise of exploration. However, De Beers dismissed the allegations as far-fetched.

Mugabe was now history and the ‘new’ administration of president Emmerson Mnangagwa had been courting international investors. They also recently came up with a new diamond policy, which opened room for two new diamond mining firms and foreign ownership.

The two were not known and it was interesting to hear Reuters reporting that Zimbabwe’s mines minister Winston Chitando said Harare would allow De Beers and Vast Resources to explore for diamonds in the southern African country. Vast, which teamed up with Botswana Diamonds, had exclusive access to key diamond concessions in Marange through an agreement with a community organisation.

However, a spokesperson for De Beers David Johnson told Rough & Polished’s Mathew Nyaungwa that the group never had discussions with Harare about returning to explore for diamonds. He also commented on provenance and responsible sourcing, inter-alia.

Below are excerpts from the interview.  

Zimbabwe’s mines minister was recently quoted by Reuters as saying that De Beers will be allowed to explore for diamonds in the southern African country. What is your take on that?

We are aware of the reports, but we have had no discussions with Government in Zimbabwe about returning to explore for diamonds.

Did Harare invite De Beers to operate in the country?

No, we have had no discussions with Government in Zimbabwe about operating there.

What is your view on the potential of Zimbabwe’s mineral resources?

We currently have no particular view on Zimbabwe’s mineral resource potential as it’s not a country in which we operate.

The Zimbabwean government under the leadership of the then president Robert Mugabe once accused De Beers of looting diamonds in Marange. De Beers denied this. Is there bad blood between De Beers and Harare?

As we have stated many times before, accusations of looting are baseless and completely false.

When did De Beers explore for diamonds in Zimbabwe and what made you exit the country?

An exploration team from De Beers arrived in Zimbabwe in 1993 and left in 2006, and first prospected in the Marange area in the late 1990s. Amongst the reasons for relinquishing the Marange licenses back to the Government were that after carrying out sampling across the area we concluded that the deposit did not fit the profile of our other activities elsewhere in southern Africa. De Beers Group's exploration focus is on primary deposits and our view was that our resources would be better invested in other prospective areas more suited to our commercial objectives. In addition, the Government had created an environment of uncertainty regarding the status and future of the concession and by 2006, the area was being worked by unmanaged diggers. All of this resulted in an unacceptable level of risk for De Beers Group in maintaining a presence.

De Beers has a residual presence in Angola since 2014 and you were also recently invited to mine diamonds in the country. Did you accept the invitation?

Bruce Cleaver, De Beers Group’s CEO, was invited to meet with President Lourenço in Angola to discuss the country’s diamond sector. While there is nothing further to report at this stage, we look forward to continuing the positive dialogue.

There had been a lack of concessions for the exploration of diamonds issued by Angola’s Endiama. Do you expect this to change under the new administration of president João Lourenço?

Questions regarding the approach to exploration concessions issued by Endiama would need to be posed to the relevant individuals in Angola.

South Africa’s Department of Mineral Resources approved 23 of your prospecting licence applications in the Free State, Limpopo and Northern Cape Provinces. Can you provide an update on the remaining 31 prospecting licence applications?

We will be engaging with the Department of Mineral Resources from January next year regarding the remaining prospecting licences.

Reports also suggested that De Beers is set to partially relax its source-disclosure restrictions for sightholders as calls for transparency grow to a crescendo. Why can’t you fully lift the ban?

De Beers Group has been at the forefront of the industry’s efforts on provenance and responsible sourcing for a long time (for example through key roles in the Kimberley Process, the RJC, as well as the development of the Best Practice Principles and the focus on financial transparency and robustness). We are also currently making substantial investments in Tracr™, the end-to-end asset-tracking blockchain platform, developed by the diamond industry, for the diamond industry. Tracr will be the ultimate in provenance assurance in the long run.

De Beers Group has always provided Sightholders with the ability to provide assurance about the responsible sourcing of rough diamonds purchased from Sights through provision of an invoice statement specifying country / countries of origin (all of which – Botswana, Namibia, South Africa and Canada – are Kimberley Process compliant), as well as an invoice statement confirming that the diamonds are compliant with the Best Practice Principles.

However, some Sightholders expressed a desire also to be able to provide a corporate source of origin. As De Beers is both a supplier of rough diamonds and a highly-recognised consumer brand at the retail level, we are in a unique position with a distinct challenge. If Sightholders were to position rough diamonds bought from De Beers Group downstream as ‘De Beers diamonds’, this could create consumer confusion with products sold by De Beers Jewellers. Having diamonds positioned as ‘De Beers diamonds’ downstream without us having any influence on what happens to them after we have sold them also exposes our brand to unacceptable risk.

As such, we are consulting with Sightholders on the proposal for them to be able to use ‘DTC’ as the source of origin for their diamonds purchased directly from Sights, as this has widespread trade recognition and understanding, but avoids creating challenges related to the De Beers brand name. However, we will go further than many other companies – not only will we provide DTC as corporate source of origin, but we will provide further information on the sustainability credentials of the mines that supply diamonds for this source on a refreshed website.

Through this approach, coupled with the journey towards provenance assurance in an entirely new way through Tracr, De Beers Group will continue to play a leadership role in this important area.

Lastly, what is your projection of the state of the diamond industry next year?

There remains a great deal of opportunity for the diamond sector, but capitalizing on the opportunity will require all parts of the sector to focus on meeting the evolving expectations of consumers, responding to the changing retail landscape, and harnessing the power of technology. The sector can look ahead with positivity, but we will need to keep an eye on macroeconomic developments and political issues as these could have a significant impact on the sector’s prospects.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished