Charles Wyndham Launches Attack on Finance Deal for Botswana Polishing Initiative

04/08/2016 11:00

Polished Prices' Charles Wyndham has launched a scathing attack on the recently announced US government initiative to finance diamond cutting and polishing in Botswana via the Overseas Private Investment Corporation (OPIC) – a pledge made in 2008 but shelved due to the financial crisis that struck later that year which led to a severe downturn in diamond sales. It involves the sum of $250 million with the American government taking 75% of the risk on loans for diamond purchases for local cutting.

"Since 2008 the one incontrovertible fact that has been rammed down everyone’s throat is that cutting or ‘beneficiating’ diamonds in Botswana has been a total failure," Wyndham writes. He adds that several factories have changed hands in Botswana "as the hope for leverage to get rough never ceases to draw the flies to the flame, but there is no reason in logic why the new owners of these factories should have any more chance of success at cutting than the previous owners. Getting top dollar for their resource and letting diamonds flow to the most efficient places to be maximized is where countries can get the most benefit, assuming that they handle the resultant revenues prudently to maximum the advantage locally. He adds that "however laudable it might be to keep promises, to do so when the premise upon which they were made have been proven to be false, seems about as silly as you can get and leaves me with the simple question, who is going to benefit."