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Diamond mining becoming costly – Alweendo

Diamond mining becoming costly – Alweendo

Business Reporter

THE Minister of Mines and Energy, Tom Alweedo, has stated that currently, diamond mining in sub-Saharan Africa is becoming a costly activity due to a multitude of challenges. 

 

Alweendo made these remarks at the opening of the Botswana Diamond Conference 2019, held under the theme “consumer, community, cluster development and collaboration”.

 

The conference is a crucial engagement for the global diamond industry and for respective diamond producer countries. 

 

Alweendo stated that notwithstanding the current midstream challenges or the challenges of global macro– economics, as these are cyclical realities of doing business, there are key challenges faced by the diamond industry currently.

ARE DIAMONDS FOREVER? picture for illustrative purpose only. Photo: contributed. 

He stated that southern African mines are getting older and more and more expensive to extract from.

 

Alweendo further stated that the emergence of Lab Grown Diamonds presents a peculiar challenge. 

 

“As we all know, the only true source of value for our diamonds remain the consumers’ desire for our diamonds. The consumer is becoming increasingly sophisticated and demands greater evidence that our diamonds do not harm the environment nor the people who work on our mines,” Alweendo said. 

 

He also stated that shareholders are demanding greater returns on their capital and that employees are demanding greater remuneration perks. 

 

“Our communities are demanding more direct tangible benefits from our mining operations. Given these challenges for both our respective diamond producing countries, as well as the challenges faced by the diamond industry, the question that arises is – where to from here?” Alweendo questioned. 

 

The minister further advised that a new model must emerge, one that truly seeks to find an inspired partnership that shares the benefits accruing from diamonds on an equitable basis – for the benefit of our people, the sustainability of the industry and enhancing the diamond purchasing experiences for consumers globally. 

 

“The theme of this Conference makes me wonder if the conventional old model of mining companies – that of simply trying to negotiate the best deal for themselves, and governments simply trying to extract as much as possible from taxes and royalty – is the best way for the realities of our new world order,” he said. 

 

He added that the development of diamond supply chain needs to focus on innovation, differentiation, and disruption.

 

“We must accelerate technology development in the industry if we are to succeed in managing the challenges presented to us by issues such as Lab Grown Diamonds, consumer demand for carbon neutral production, as well as increasing consumer demand for greater evidence of the benefits of diamonds to communities,” Alweendo stated.