Botswana Government Wants First Dibs on Exceptional Diamond Recoveries

Mining and Exploration
19/09/2017 11:46

The government of Botswana is amending the law to give the state the first option to buy ‘unusual’ diamond finds such as the historic Lesedi La Rona recovered at Karowe Mine two years ago, writes Botwanan news outlet Mmegi Online. A recently filed draft bill to amend the Precious and Semi-Precious Stones Act contains a new clause that compels any producer that comes into possession of an unusual rough or uncut diamond to notify the minister of mines within 30 days, following which the government shall have the right of first refusal to the stone. “The price to be paid by government for a rough or uncut precious stone offered for sale by the producer shall be agreed between the parties in accordance with the current market price of the rough or uncut precious stone,” the bill states. The bill did not give a precise definition of “unusual”.

This move by Botswana is the latest in a series of similar measures by African countries such as Lesotho, Tanzania and Zimbabwe to exert tighter control on their mineral resources. Chief minerals officer in the Ministry of Mineral Resources, Green Technology and Energy Security, Moses Tshetlhane told BusinessWeek that amendment of the law was motivated by recovery of some unusually large diamonds, namely: the Lesedi La Rona and Constellation. In November 2015, Canadian miner Lucara Diamond discovered the 1,109 carat Lesedi La Rona at its Karowe Mine; the stone is still to be sold after an attempt to auction it failed to attract a price the producer expected. Lucara also unearthed a 812.77 carat stone at roughly the same time, The Constellation, which fetched $63 million at an auction in 2016. 

Some of the amendments to the Act include stiffer penalties for illegal trade of diamonds, as well as false declarations of discovery of precious stones. Producers that make false declarations about the place they would have discovered a precious stone should also be liable to penalties prescribed by law for a crime of perjury, and all rights acquired by them in consequence of any such declaration shall lapse. “Some of the key changes to the Act are to remove trade barriers and increase penalties to deter any potential illegal trade as well as improve facilitation in the sorting, valuing, aggregation and selling of rough diamonds. The Precious and Semi-Precious Stones Act is being amended to ensure that it stays relevant and applicable to the prevailing and ever changing environment in the diamond industry,” added Tshetlhane.