Tag Archives: Botswana

Botswana: the Central Kalahari Game Reserve and the eviction of Bushmen

• Thousands of Gana and Gwi ‘Bushmen’, and Bakgalagadi, have been forcibly evicted from their ancestral lands in the Central Kalahari Game Reserve(CKGR) in Botswana. This is a gross violation of their human rights and is against international law. Unless they get their lands back, these Bushman tribesare unlikely to survive as peoples.• The government wrongly claims that these relocations are voluntary and gives several quite different reasons for them: these can be shown to be false
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• Diamonds have been found at a Bushman community called Gope(pronounced hop-ey), where test drilling has taken place and a rig and basic installation have been mounted. Diamonds have been found in test drilling nearother Bushman communities. There is, however, no mining at present in the CKGR.• The number of diamond exploration licences given out by the government inthe CKGR has increased dramatically since the Bushmen were evicted.
De Beers and Debswana
• Diamond mining in Botswana is controlled by a company called Debswana(ie. De Beers Botswana), which is owned on a 50/50 basis by the government and by De Beers.• Many of the directors of Debswana are senior political figures in Botswana.For instance, the deputy chairman of Debswana, Dr. A.R. Tombale, is the permanent secretary in the Botswana Ministry of Minerals, Energy & Water.Another director, Eric Molale, is permanent secretary to the president of Botswana. Another director, Serwalo Tumelo, is permanent secretary at the Ministry of Finance and Development Planning.• Diamond industry sources call this ‘interdependence’ and a ‘mutual beneficially [sic] relationship model’.
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1 Civilisation in reverse, Stephen Corry, Mmegi, Botswana, 8-14 March 2002, reproduced inhttp://www.survival-international.org/bushman_press_mmegi3.htm2 Tacy Diamond Intelligence Briefs, Chaim Even-Zohar, May 2001.

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• More simply, the president of Botswana has said, ‘The partnership betweenDe Beers and Botswana has been likened to a marriage. I sometimes wonderwhether a better analogy might not be that of Siamese twins.’
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• De Beers is no longer a public company and operates with great secrecy: it is likely that only a handful of senior people know what the diamond (and precious metal) mining potential of the CKGR really is. Accurate information about this is not likely to be given to anyone else, either inside or outside Botswana. As the Financial Times says, ‘Anonymity is paramount in the diamond trade. The industry is secretive to the point of paranoia … Contract sand written codes are virtually unheard of.’
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Discussing its plans to explore for diamonds near Debswana’s Orapa mine, the mining company African Diamonds stated, ‘Ground geophysical surveys suggest that some of the kimberlites [diamond-bearing rock] may be bigger than reported by De Beers.’
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• De Beers keeps the price of gem diamonds high by severely restricting supply.As The Times has reported, ‘The company has vast diamond stockpiles, but keeps prices high with a tight control on the supply line.’
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De Beers’s intention,therefore, might be not to mine in the CKGR for years, even decades, until other mines are exhausted: keeping the find in the ground, out of reach of other companies, might be eventually just as profitable for both the company and the government as actually extracting the diamonds would be. Indeed, at times, as much as 20% of Botswana’s diamonds have been stockpiled to restrict supply,so it makes economic sense not to mine the CKGR diamonds yet. Keeping them in the ground is cheaper, and safer, than stockpiling in vaults.• Botswana’s three main diamond mines, Orapa, Jwaneng and Letlhakane have turned the country into the world’s foremost producer of the gems; all will inevitably become exhausted in the future.
Sequence of events
• A diamond deposit was discovered at Gope in the early 1980s, and in 1982 DeBeers entered into a joint venture with another company (Falconbridge) to evaluate the find.• The Minister of Commerce & Industry announced the decision to relocate the Bushmen on 12 October 1986, but no action was taken.• A formal evaluation of the mine was completed in 1996.• Apparently coincidentally, the first enforced evictions started in May the following year. One Bushman community, Xade, inside the CKGR, which wasalready equipped with a school, clinic, airstrip, and borehole for water, was completely removed.
3 The disposable, Adam Welz, Noseweek, South Africa, May-June 2002.4 Hard edge to glittering rocks, Francesco Guerrera, Financial Times, 8 November 2002.5 Mmegi, 19 September 2003.6 ‘Clone stones – the flawless diamonds made to order’, The Times, p.5 T2, 27 October 2003.

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• Also apparently coincidentally, in 1997 less than two months after the eviction of Xade, the mining company Anglo American (which owns part of De Beers)sub-contracted the company, Nepcal, ‘to ferry mining and drilling equipment toXade and other destinations’ in the CKGR. When asked about this, AngloAmerican, ‘denied any knowledge of its activities within the reserve.’
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In 2002,the company said it had indeed ‘drilled two exploratory holes in the CKGR in1997’ – one near Xade – but said it had had no contact with Bushmen (who had,of course, already been moved away). Concerning its contract with Nepcal, thecompany said, rather oddly, ‘We have not been able to verify beyond doubt the existence of such a contract.’
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In June 2003 the Ghanzi District Commissioner said that ‘some prospecting companies had discovered diamonds in the area [of Xade]’.
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This appears to be the same deposit referred to by the Danish organization IWGIA (International Work Group for Indigenous Affairs):‘Anglo-American has been granted a concession for exploration in 1997 near Xade, in the west of the reserve, where a promising deposit has been discovered at Xaxa.’
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• In 1999, mineral exploration camps were set up within a few miles of Molapo,a major Bushman community within the CKGR.
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• In 2002, further enforced evictions occurred, with more Bushman communities, including Molapo, removed in their entirety. Government officials destroyed another water borehole in a Bushman community, forbade all hunting and gathering, and emptied all the Bushmen’s stocks of water.• Almost the entire CKGR is now being explored for both diamonds andprecious metals, with the prospect ‘of further encroachment’ into the CKGR by mining activities said to be ‘highly likely’.
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Description of the finds
• The CKGR lies in the middle of the world’s richest gem diamond fields.• The Gope find was originally described by industry sources as being very significant. For example, Barry Bailey, in charge of prospecting for De Beers,called it ‘moderately large’ in 1997,
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and Matthew Hart, editor of a diamond trade journal, described it as ‘the best new target in the Kalahari’.
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• Falconbridge, part-owner of the Gope deposit, estimates it would produce 1million carats per year.
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This is the same as Letlhakane, the third-largest diamond mine in Botswana, and one of the most productive in the world.
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7 Sunday Independent, South Africa, 31 August 1997.8 Letter from Edward Bickham, Anglo American, to Survival, 11 December 2002.9 “Animals, not diamonds, caused Basarwa to be moved”, Botswana Gazette, 18 June 2003.10 Christian Erni, ‘Resettlement of Khwe communities continues’, IWGIA Indigenous Affairs, July-Dec 1997.11 Seeking sustainable strategies: the politics of resource rights among the central Kalahari San, Robert Hitchcock.12 Gope Environmental Impact Assessment, May 1999, section 4.9.13 Forced march into oblivion, Fred Bridgland, Sunday Telegraph, November 1997.14 ‘Diamond’, Matthew Hart, Fourth Estate, 2002, p.71.15 Falconbridge Ltd 1999
Annual Report.
Toronto: Falconbridge Ltd. p. 30.

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• Falconbridge estimates that the Gope deposit would produce 20 carats of diamonds per 100 tonnes of ore, and contains 77.3 million tonnes of ore.
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Thiscompares with the Ellendale mine in Australia, which produces 6.2 carats per100 tonnes and contains 90 million tonnes of ore
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;the Kelsey Lake Mine in theUS, which produces 3.4 to 4.6 carats per 100 tons of ore and contains 18.7million tons of ore
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; and De Beers’s three Kimberly (S. Africa) mines, whichtogether produce 18 carats per 100 tons.
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It also compares favourably with DeBeers’s planned new mine in Ontario, Canada, which it estimates will produce22 carats per 100 tonnes of ore from a total of 28.7 million tonnes, at a planned rate of 600,000 carats per year.
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• The Bushmen’s ancestral land lies at the heart of the richest diamond-producing area in the world. Kalahari Diamonds, currently surveying theCKGR, says ‘the prospect of a major new diamond discovery is extremely likely’.
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• As well as Gope, there are other known finds on Bushman lands. For example,there are ‘substantial’ deposits in the Kukama (also spelt Gugama) area where test drilling has been carried out.
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• De Beers has already spent a large amount of money studying the Gope site(including contracting an anthropologist, James Suzman, to study Bushman land rights in the CKGR).
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• In June 2001 De Beers’s company secretary Sheila Khama said, ‘The company reserved the right to review the economic viability of the project from time to time so as to decide whether or not to proceed with full scale mining.’
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• Early in 2002 De Beers said it had no plans to mine ‘for the foreseeable future’
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; later that year it described the find as ‘sub-economic’ (sic).
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However, at the end of 2002, a De Beers spokesperson stated, ‘We can’t say we will never mine it.’
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In 2005 De Beers’s head of public affairs, Andrew Bone,said, ‘We do hope to return and have a mine there one day, that would begreat.’
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• In November 2000, De Beers took out a retention licence on Gope. These licences, valid for three years but renewable, had been created by a new mining law in that year: their purpose is to ‘allow a company that has completed an
16http://www.mining-technology.com/projects/debswana/accessed 18 Mar 2005.17 Falconbridge Ltd 2000
Annual Report
. Toronto: Falconbridge Ltd. p. 28.18http://www.kimberleydiamondco.com.au/printable/printable.cfmaccessed 10 Mar 2005.19http://www.coloradomining.org/cattany121202.htmlaccessed 10 Mar 2005.20http://www.maykuth.com/Africa/diam1008.htmaccessed 10 Mar 2005.21 The North Bay Nugget, Canada, 16 Nov 2004, p.A4.22http://www.kalaharidiamonds.com/kalahari_strategy.phpaccessed 21 Mar 2005.23

2nd draft management plan for CKGR & Khutse Game Reserves, Dept of Wildlife & National Parks, 1998,p.29.24 Desktop investigation into the status of Bushmen in Botswana, Suzman & Pedder, Windhoek, 1998.25 Botswana Gazette, 14 June 2001.26 Letter from the Chairman of De Beers, N. Oppenheimer, to Survival, 15 March 2002.27 Letter from De Beers’s public affairs consultant, F. de Villiers, to Survival, 1 July 2002.28 De Beers spokesperson Tracey Peterson, quoted on http://www.busrep.co.za, posted 20 November 2002.29 Andrew Bone speaking during debate at Bedales school, UK, 21 January 2005.


A girl’s best friend: De Beers Diamonds & Scandals

For decades, De Beers has been the preeminent name in diamonds.

Thanks to a stockpile of the world’s rough diamond supply, indelible marketing schemes and even negotiations with foreign governments for their diamonds, De Beers — owned by the Oppenheimer family since the 1920s — has been the most important name in one of the world’s most lucrative businesses for almost a century.

But with recent news of the Oppenheimers selling out to fellow mining company Anglo American, it’s time to look back at the billion dollar rise and fall of a monopoly that has crushed competitors and cash-strapped governments since the 1800s.

Diamonds became a symbol of love thanks to De Beers, which is fitting, since De Beers became what it is today because of a love story: the love of money.

In the beginning, the diamond trade took place mostly in India and Brazil. With the discovery of diamonds in South Africa, the trade simultaneously took off and become much less profitable
In the beginning, the diamond trade took place mostly in India and Brazil. With the discovery of diamonds in South Africa, the trade simultaneously took off and become much less profitable

Up until the mid-1800s, diamonds were a rarity and could be seen only on the hand of a monarch. But the diamond rush that began in South Africa in the second half of the 19th century flooded the market with diamonds, which, as any good businessman knows, kills demand.

It would take some ingenious plotting and advertising to keep the diamond’s reputation as intrinsically valuable and desirable, which is where De Beers comes in.
The story of De Beers starts with English-born businessman Cecil Rhodes, who broke into the diamond business in South Africa by renting water pumps to miners before buying diamond fields of his own
The story of De Beers starts with English-born businessman Cecil Rhodes, who broke into the diamond business in South Africa by renting water pumps to miners before buying diamond fields of his own

Rhodes, sensing he had ventured into an untapped market, bought up diamond fields, including one owned by two brothers named “de Beer.” In 1880, he bought the claims of fellow entrepreneur and rival Barney Barnato to create the De Beers Mining Company.

The tendency in diamond mining is to combine with smaller groups to form larger ones. Individuals needing common infrastructure form diggers committees, and small claim holders wanting more land merge into large claimholders. Thus, it only took a few years for De Beers to become the owner of virtually all South African diamond mines.
In 1888, De Beers Consolidated Mines, Ltd. was formed, creating a monopoly on all production and distribution of diamonds coming out of South Africa

De Beers took on many forms around the world as its influence in the diamond trade grew. To control supply and demand—and thus, prices—Rhodes created distribution arms through “The Diamond Syndicate,” including “The Diamond Trading Company” in London and “The Syndicate” in Israel.

Diamond claim holders and distributors joined up with De Beers because their interests were the same: create a scarcity of diamonds and high prices will follow. And while other commodities have seen price fluctuations over the years, diamonds prices have climbed since the Great Depression.
By the time Rhodes died in 1902, De Beers controlled 90% of the world’s rough-diamond production and distribution, but it was Ernest Oppenheimer who made the company an empire

Oppenheimer, a rival diamond producer with his own production company (Anglo American Corporation, which will reappear later in the story) essentially bought his way onto the board of directors over the years. By 1927, he was chairman of the board.

Under Oppenheimer, De Beers and its Central Selling Organization established exclusive contracts with suppliers and buyers, making it impossible to deal with diamonds outside of De Beers.

The structure of the business remained the same for much of the 20th century: A De Beers subsidiary would buy the diamonds. De Beers would determine the amount of diamonds they wanted to sell, and at what price, for the whole year. Each producer would then get a cut of the total output, and buyers would take their diamonds to be resold in places like Antwerp and New York.
A worldwide decline of diamond prices in the 1930s led the Oppenheimer family to begin their world famous marketing campaign, “A diamond is forever.”
A worldwide decline of diamond prices in the 1930s led the Oppenheimer family to begin their world famous marketing campaign, “A diamond is forever.”

Henry, son of Ernest, traveled to New York in 1938 to meet with advertising agency N. W. Ayer. The United States was seen as the next big market for diamonds, and a very effective game plan was formed to sell diamonds to Americans: convince them that diamonds equated love.

Through advertising, men were convinced that the size of the diamond in an engagement ring showed how much they loved their fiancée. Movie stars were shown wearing diamonds in the relatively new motion pictures. And the most effective piece of advertising came in 1947, with the creation of the tag line “A diamond is forever.” This later become the company’s official motto.

As a result of these campaigns, the number of brides receiving engagement rings, and diamond prices in the U.S., increased dramatically.
De Beers forged new international markets using similar advertising campaigns in places like Japan, Germany and Brazil

Having conquered the United States by the 1960s, De Beers set its sights on new territories.

Japan never had a tradition of romantic marriage, making diamonds a tough sell for brides. And even by 1959, no imported diamonds were allowed into the country by the postwar government. But by using slick advertising, playing up diamonds as a symbol of the modern West, or a way to break from traditional Japanese norm, De Beers was able to build a billion-dollar-a-year industry.

By 1981, almost 60 percent of Japanese brides wore diamonds, up from 5 percent in 1967.
When faced with a threat to their diamond monopoly, like one from the Soviet Union, De Beers simply bought up their inventory to maintain complete control

The discovery of diamonds in Siberia in the 1950s was a threat to the control De Beers kept over the diamond supply. Rather than compete with Russian diamonds, De Beers offered to buy almost everything that came out of Siberia — funneling all the world’s diamonds through a “single channel.”

Even though Russian diamonds were smaller, their use in “eternity rings” and other miniature jewelry proved very successful, and allowed for a lucrative partnership between De Beers and the USSR.
The creation of “Debswana,” a joint venture between the company and the nation of Botswana, meant a significant shareholding claim in De Beers by the African country

De Beers in Botswana

Diamonds from Botswana were considered valuable enough to give the government of the country a 15 percent share in De Beers in 1969. All rough-diamond mining and distributing is done by Debswana, making it the biggest non-government employer in the country. The deal is still in place today, and there’s even talk of increasing Botswana’s share to 25 percent.

But by the beginning of the 21st century, diamond-producing companies had enough of De Beers’ monopoly, forcing a change in structure for the company

Numerous “revolts” against the De Beers cartel had occurred in places like Zaire and Israel over the years, which were mostly quashed by De Beers releasing stockpiles of diamonds similar to that county’s product, driving down demand.

But more recently, countries with enormous stockpiles of their own, like Russia, Canada and Australia, have refused to cooperate with the single channel system.

These problems, along with issues of flat prices, forced De Beers to switch up the company’s strategy. In the last decade De Beers has moved away from rough-diamond supplying and controlling the entire industry, instead focusing on promoting its own brand of diamonds and retail stores.

De Beers reported a 74 percent increase in profits in the first half of this year alone. And the number of De Beers stores worldwide has risen from just one in 2001 to 39 in 2008, with 17 in Asia alone.

Despite its high earnings and a lucrative transformation, in November De Beers ended its 80 year stranglehold on diamonds by selling a majority ownership to Anglo American plc

Anglo American, which previously had a 45 percent stake in the company, bought the De Beers Groups’ 40 percent share for $5.1 billion in cash. Anglo American, previously started by Oppenheimer, will take over De Beers from that very same family.

As for the reason of the sale: apparently, there is no one in the Oppenheimer family that wants to continue in the diamond business.
And yet, the De Beers empire marches on, opening their third store in mainland China on December 14th

A 55-square meter De Beers Diamond Jewellers store opened at the Times Square Mall in Dalian, China just days ago. According to the company, this opening follows the success of the two other De Beers stores in the country.

Although the people who made De Beers the world’s most powerful monopoly are no longer involved, the company itself will continue to be a billion-dollar business.

Read more: http://www.businessinsider.com/history-of-de-beers-2011-12?op=1#ixzz20Jj5vREg


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