Linkages in Botswana's Diamond Cutting and Polishing Industry

Mbayi, Letsema

Linkages in Botswana's Diamond Cutting and Polishing Industry

Working Paper

2011

Publisher

University of Cape Town

Department

Centre for Social Science Research(CSSR)

Faculty

Faculty of Humanities

Abstract

The paper aims to investigate whether Botswana is succeeding in developing a viable and sustainable diamond cutting and polishing industry as part of the Government’s mineral beneficiation policy. This paper also aims to examine the nature and extent of forward linkages in the cutting and polishing industry and what role the linkage drives are playing in the widening and deepening these linkages. The research questions are addressed through by primary and secondary data collection. The research found that despite the weak economic rationale for the beneficiation policy, in the last 5 years Botswana has succeeded in developing a diamond cutting and polishing industry with significant local linkages. The forward linkages are policy driven and their progress is being hindered by the limited downstream skills amongst locals. Botswana’s cutting and polishing industry appears to be viable as secondary data suggests that the manufactures are either breaking-even or making a profit. The sustainability of the cutting and polishing industry hinges on viable rough diamond supply to the manufacturing firms. Significant prospecting activities, the expansion of mines and the current strategy by the biggest producer to optimize revenue (by only mining diamonds when demand exists) could increase the life diamond mining past the Government’s current forecast of two decades.

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