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Orapa region mines pick De Beers’ output

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Planned production increase at Debswana’s mines in the Orapa region – Orapa, Letlhakane and Damtshaa has pushed up De Beers’ rough diamonds output for the last quarter of 2018, the group’s latest report has indicated.

De Beers’ latest production report shows that rough diamond production increased 12 percent to 9.1 million carats in the last quarter of 2018. The increase is compared to 8.6 million carats recorded in the third quarter and 8.9 million carats in the second and 8.4 million carats in the first quarter.

Despite the good performances by Orapa mines, De Beers missed its production target of 35 to 36 million carats for 2018, as the total production for the year landed at 35.3 million carats. Other mines that contributed to production include Jwaneng, Namibia’s Namdeb Holdings, South Africa’s De Beers consolidated mines and Canada’s Gahcho Kué.

On the other hand, the full year rough diamond sales volumes were four per cent lower at 33.7 million carats compared with 35.1 million carats in 2017.Meanwhile, the 2019 production guidance for De Beers is 31 to 33 million carats, subject to trading conditions. “The lower production is driven by the process of exiting from the Venetia open pit with the underground becoming the principal source of ore from 2023.

“Associated with this, an increased proportion of production in 2019 is expected to come from De Beers Group’s joint venture partners, a proportion of which only generate a trading margin, which is lower than the mining margin generated from own mined production,” said De Beers’ latest production report.

Meanwhile, local analyst Econsult’s economic review for the fourth quarter 2018 has observed that the global diamond market has been performing reasonably well in overall terms, but with stress in particular segments that may reflect structural change and potential volatility going forward.

Econsult however bemoaned that the price increase for rough diamond has squeezed profit margins for dealers and cutters, as polished prices have not increased commensurately.
“The problem has been particularly acute for small, low value diamonds, perhaps due in part to pressure from increasing supplies of synthetic diamonds,” said Econsult.

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‘Manufacturing holds key to economic growth’

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Barclays bank’s economist Naledi Madala has urged the country to consider manufacturing, as a key tailwind to drive the economy and reduce inequality.

She was speaking at a gathering organised by the bank which focused on economic outlook for 2019. “We should not make a mistake of leapfrogging without manufacturing,” said Madala, lamenting that the country’s diversification remains a pipeline dream, as the diamond is still the economy’s mainstay. She bemoaned that mining activities in the country could not spring forward diversification, though non-mining GDP has been steady over the years.

“Extractive industries are not good stepping stones for diversification, the sector does not prepare us for the next step,” said Madala at the Barclays’ Economic Outlook Forum Review 2019. The economist further noted that government should confront head-on challenges of productivity and competitiveness to attract the much needed Foreign Direct Investment (FDI). Though diversification efforts continue to hit a brick wall, Madala said the country should expect increased activities in the mining sector hinged to ramp up in coal production in the year ahead.

She also implored government to consider a welcoming attitude towards foreign investors and generous tax incentives to businesses that set up in the country. Madala is also upbeat that the use of public private partnership model could also help diversify the economy coupled with privitisation. “Privitisation will offer opportunities for growth, through the renewed optimism from government, as business confidence has improved,” said Madala.

She implored the government and the business community to access what is going to drive and hinder growth highlighting that key headwinds to growth are income inequality, diversification challenge and productivity, among others. “The pace of poverty reduction has slowed down, while income inequality goes up,” said Madala

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MINISTER BEWAILS BAD REPAYMENT BY YOUTH

Keikantse Lesemela

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Minister of Youth Empowerment, Sports and Culture Development, Tshekedi Khama has told parliament his ministry continues to face challenges on the repayment of Youth Development Fund (YDF) loans.

Recently presenting the budget to Parliament, Khama said this financial year the ministry has received a total of 2582 YDF applications and approved 983of them to the value of P98 million. He said the programme attracts a high level of interest from youth but the ministry is only limited to funding a maximum of 1200 youth projects annually due to budget limitations.

“However the greatest challenge for the Fund is the repayment of the loan component by the majority of the youth businesses. The youth have advanced number of challenges for this including high rentals for operating spaces, low market access owing to tight competition and limited production capacities,” said Tshekedi, adding that they continue to pursue beneficiaries to repay the loans.

Out of the 919 businesses funded 1058 jobs have been created. The minister highlighted that disbursements of funds will continue to be undertaken until the end of the financial year. “The YDF is currently under review in line with the pronouncement made by the President, Dr Mokgweetsi Masisi in the State of the Nation Address, to improve beneficiaries through training, and encourage consortia and cooperatives,” said Tshekedi.

The ministry assists YDF beneficiaries in marketing their products and services through fairs and exhibitions. The ministry also runs entrepreneurship-training seminars for youth and in the past year 3692 young people were trained. Over 600 youth businesses attended fairs and exhibitions to market their products and services. Currently the ministry is collaborating with Local Enterprise Authority (LEA), First National Bank Botswana and Citizen Entrepreneurial Development Agency (CEDA) on training in entrepreneurship development and mentorship of YDF beneficiaries.

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