Andrew Maykuth Online
The Philadelphia Inquirer
April 21, 2002
Mines a gem for Botswana
The business accounts for much of the nation's economy and world's diamonds.
Jeremy Taylor, mining manager at the world's most productive diamond mine, hold a chunk of diamond-bearing kimberlite.

JWANENG, Botswana - The world's most munificent diamond mine is a yawning canyon gouged out of the Kalahari desert, nearly two miles long, a mile across and 850 feet deep - almost as deep as One Liberty Place is tall.

The Jwaneng mine excavates about 38 million tons of ore and waste from the pit each year, filling several hundred thousand enormous trucks the size of two-story houses.

Out of all that comes a mere two tons of diamonds, enough to fill a few wheelbarrows.

"If you look at it from a rational point of view, it's totally irrational," said Jeremy Taylor, Jwaneng's mining manager, as he stood atop a mountain of discarded mine tailings visible 15 miles away on the featureless landscape. Irrational in terms of scale, perhaps, but not in terms of Botswana's economic health. One-third of all gem-quality diamonds in the world come from this south African nation, and half of those come from Jwaneng, "the place of small stones."

Debswana, a partnership between the Botswana government and diamond giant De Beers, is responsible for a third of the country's total economic output. Debswana's three mines generate half the government's tax revenue and three-quarters of its foreign exchange from annual sales of $2 billion.

With so much riding on diamonds, government officials here are understandably nervous about a worldwide campaign by human rights activists to link illicit diamond production to civil wars in Angola, Sierra Leone and Congo.

Botswana is worried that its legitimate sales might sink, tarnished by the effort to stigmatize all stones as so-called "conflict" or "blood" diamonds.

"As soon as you come into Botswana, the word 'conflict' should be thrown out," said Linah Mohohlo, the governor of the Bank of Botswana.

Diamond-mining has transformed this dusty country of cattle ranches and game parks into one of Africa's most prosperous nations.

Since the former British protectorate of Bechuanaland got its independence in 1966 - a year before diamonds were discovered here - diamond revenue has built modern networks of good roads, free schools and free health care. Gems have financed modern banking and telephone systems.

"In this country, diamonds are a boy's and a girl's best friends," said Boyce Sebetela, assistant finance minister. "Our diamonds have taken us from nothing."

Thus Botswana's leading role in the drive to create a program that will certify the origin of stones and prevent the use of gems to fund African civil wars.

Last month participants in the effort - including diamond industry representatives and human rights groups - agreed on a process requiring that every stone come with documentation of its origin and legitimacy.

The plan still must be approved by more than 30 countries and the World Trade Organization, but Botswana officials say they are confident they will weather the crisis over "conflict" diamonds.

It is perhaps evidence of diamonds' enduring popularity that gem sales were more affected by the U.S. economic downturn than by the effort to link them to distant civil wars.

But a new threat looms with recent reports linking operatives of Osama bin Laden's al-Qaeda terrorist network - widely presumed responsible for the Sept. 11 attacks in New York, Washington and Pennsylvania - to buyers of illicitly mined diamonds from Sierra Leone.

"If anybody associates diamonds with 9/11, we'd be dead," said Debswana managing director Louis Nchindo. The United States accounts for half of all diamond sales worldwide.

To offset the potential bad publicity, Debswana has hired public relations firms to promote its image as a free-market nirvana, where responsible management of diamond resources has spun off huge benefits for the population of 1.5 million.

Officials cite their husbanding of the nation's precious resource when they proudly note that Botswana stands apart from most African countries.

"It's a combination of resources and good government, a government free of corruption," said Nchindo. "Our leaders have no material ambition. We are a country of farmers, rural farmers. Cattle taught us patience."

They may be patient, but Botswanan officials also are frustrated that their efforts to attract international investors and diversify their economy have not taken off.

Botswana suffers in part because skeptical international investors are distracted by the troubles of its neighbors - political crises in Zimbabwe and crime in South Africa. And Botswana's high AIDS rate has scared away some investors, though President Festus Mogae has been praised for confronting the problem firmly and publicly. The government has begun to provide anti-retroviral treatments at public hospitals.

So officials here are disappointed that little attention was paid recently when the country received investment grade bond ratings from Moody's and Standard and Poor's - the highest ratings in Africa.

Said Mohohlo, the central bank governor, who oversees investment of the government's $6 billion in reserves, "It seems to me you have to do something terribly bad for the world to take notice." home page   
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