Diamonds, it turns out, aren’t forever.

In fact, the world’s richest deposit of the precious stones has a specific expiration date: 2052.

With that in mind, Botswana is determined to make the most of its vast mineral wealth to prepare for a post-gem future that is approaching fast.

Botswana’s is a standout African success story. It owes its place near the top of the continent’s development rankings to the prudent handling of its natural resources. And now the land-locked country is investing its diamond bonanza into domestic industry and workforce training.

From agribusiness to pharmaceuticals, fossil fuels to business tourism, the Southern African nation is looking to diversify beyond a lucrative but confined diamond sector. This sector accounts for a third of gross domestic product, half of government revenues and a whopping 70% of export earnings.

Key to those ambitions is the new revenue-sharing deal with De Beers, which grants the Botswana government a greater share of the diamonds mined while also giving it a role in the profitable marketing space.

“We have learned that diamonds are not forever. At some point, they’re going to run out,” says Goitseone Gadifele, the assistant general manager at Jwaneng mine. “But we do have a transition plan.”

Located 100 miles west of the capital, Gaborone, at the edge of the Kalahari desert, Jwaneng – ‘the place of small stones’ in the local Setswana language – is home to the world’s richest diamond mine.

Fully operational since 1982, the gigantic open pit – currently 1.5 miles by 1.1 miles wide and 450 metres deep – produced almost 13 million carats (2.6tn) in 2021.

Every year, three of the world’s largest excavators – the first of these giants to arrive in Africa – and a fleet of sixty 300-ton trucks work together to remove 100tn of ore and waste rock from the quarry in a perfectly timed ballet.

The mine contributes about two-thirds of revenues for Debswana, the 50-50 partnership between the government of Botswana and De Beers. Debswana recorded $4.6bn in sales last year.

“We know we are indebted to developing Botswana,” Tsetsa Pharithi says on a chilly July morning as she guides The Africa Report through a tour of the pit. “The economy is really based on diamonds at the moment.”

Having spent her entire 16-year career at Jwaneng, Pharithi has developed the skills to become one of five mining managers (and the only woman in the role).

That shift to local control is hiding in plain sight throughout Jwaneng:

• from the boardroom portrait of the mine’s first Batswana general manager in 2003 alongside a string of white foreigners;
• to the workshops where local companies are taking over maintenance of the multimillion-dollar Komatsu and Caterpillar earth-moving equipment;
• to the Botswana Oil tankers now filling the mine’s massive petrol and diesel needs after the parastatal took over from Swiss multinational Puma Energy last year.

“When the mine started, all these foreign companies, they employed the local people and they developed skills,” Gadifele says. “So those are the people that are currently owning companies.”

For the past couple of years, Debswana has been giving those companies a leg up through its Citizen Economic Empowerment Programme (CEEP). Launched in 2019, the initiative aims to invest $1.5bn in Batswana-owned enterprises by 2024 to grow local business in the country.

Part of the strategy includes partnering with South African bank Absa by vouching for the private companies working at the mine, Gadifele says. Today, some 4,000 people employed by more than 50 businesses work alongside 2,000 Debswana employees at Jwaneng.

“We had to give the confidence to the bank because mining projects are highly capital-intensive,” Gadifele tells The Africa Report. “So obviously, you needed that assurance from the end user that indeed that particular company will be supported and given enough work to be able to pay back the loan.”

Debswana’s goal, however, isn’t “citizen economic employment at all costs”, the assistant general manager says. Local companies must still compete in open bidding and prove that they are both technically and commercially sound, even if they do get help with skills training and financial help.

“We still look at cost optimisation. We want to see value for that investment,” Gadifele insists. “We are not going to say that [just] because we are in citizen economic empowerment overdrive, a citizen company [can] come in very expensive and just blindly go for it.”

Life after diamonds

Gadifele says that, given current available technology, Jwaneng should cease producing diamonds cost-effectively around 2052, although that is a moving date.

The goal is to continue mining for as long as possible. To that end, Debswanaannounced in 2021 that it was investing $6bn to dig 360km of tunnels by 2034 as it looks to start mining underground for the first time.

Even so, the diamonds will eventually run out.

With that in mind, the government has launched a campaign to graduate Botswana to a high-income country by 2036 by moving beyond mineral extraction.

“As the world’s largest producer of gem diamonds by value, we must develop value chains for raw materials to allow for greater value addition, spur innovation and growth, adapt to climate change, build sustainability, deepen economic diversification and create opportunities for exploitation of global supply chains,” President Mokgweetsi Masisi said in his opening remarks at the US-Africa Business Summit in Gaborone on 12 July.

Last year, Debswana entered into a five-year, $590m strategic partnership with Botswana Oil, which requires the parastatal energy company to transfer skills to local suppliers and transporters in exchange for supplying Debswana’s operations. The deal is expected to create new jobs in a range of ancillary services, including trucking, wash bays and maintenance.

Meanwhile, in the north-eastern town of Selebi Phikwe, the government has created a special economic zone.

The zone seeks to promote diversification away from the fading copper and nickel mining industry and toward manufacturing, tourism and agribusinesses via tax abatements, grants and land availability.

“Botswana, for a very long time, has been dependent on mining and minerals,” says Steven Lefentse Bogatsu, CEO of First National Bank of Botswana.

“It’s only in the past couple of years that we started making inroads into the value chain, around jewellery cutting and polishing. But there are more opportunities that have been identified downstream in the mining environment – opportunities around production of equipment and machines that are used in the mining environment.”

Not all the opportunities are mining-adjacent.

Jwaneng, for example, is going back to Botswana’s roots as a cattle country by investing in modern farming techniques. Gadifele says the goal is to build “one of the best agricultural parks in the world” in the area around the mine.

The park will have facilities where local ranchers will be able to process meat for export around the world, facilitated by the fledgling Africa Continental Free Trade Area (AfCFTA).

“The government is currently working hard to create those relationships and to create those opportunities for export markets,” Gadifele says.

Other areas of interest include the pharmaceutical industry, as well as sports and business tourism. Botswana is bidding to host the 2027 Africa Cup of Nations, although Namibia’s decision to pull out of a joint bid has dealt those ambitions a blow.

The country is also looking to become a regional player in the meetings, expositions, events and conventions (MEEC) space, attracting deep-pocketed businesspeople who may go on to experience the country’s expensive safaris.

This month’s US-Africa Business Summit was a test case, as the first major event held in the brand-new Royal Aria convention centre on the outskirts of Gaborone.

The Botswana advantage

Discovered shortly after independence in 1966, diamonds have long been a blessing rather than a curse, unlike in many other African countries.

Successive governments’ good governance has equipped Botswana with an educated and healthy workforce and a reliable power supply. Today, the country is looking to further wean itself off its reliance on South Africa by looking to exploit its vast coal reserves and transform them into liquid fuels.

“Because of the various benefits that the country has, we have, unlike some of some of our neighbours, a more stable power supply. We have a, shall I say, less militant workforce. We have a stable economy, political situation,” says Bogatsu, the banker. “So we are encouraging more investors to come into the country.”

The new deal with De Beers, which gradually increases the state’s share of diamond production for sale via the state-owned Okavango Diamond Company to 50% from the previous 25%, will play a key role in whether Botswana’s reinvention is successful.

“The new deal, obviously, is aimed at increasing revenue, and the increase in revenue will actually help the nation to diversify the economy […] in the sense that, after diamonds, the country should be able to sustain itself,” Gadifele says.

“Therefore, it is very critical for those revenues to be used wisely, in preparation for life after diamonds.”