Kimberley Protocol (KP) chairperson Ahmed Bin Sulayem has called for a consensual approach to determining a set of criteria to create a universal methodology for the valuation of rough diamonds.
Speaking at the opening of the second in a series of three Rough Diamond Valuation workshop-style forums, in Dubai, he said that adopting the right methodology for a standardised approach to creating a process, which will serve all areas of the rough diamond industry, from large corporations to artisanal miners, is complex.
“What we’ve achieved so far, however, indicates a willingness on the part of all diamond industry professionals to embrace the concept of a set of rough diamond valuation protocols,” he added.
Existing methods vary from country to country with some using price books and lists based on valuators’ individual categorisation of rough diamonds using references to colour, clarity, carat and cut (4 Cs). The difference in value perspective, between large corporations and smaller artisanal miners, resounded clearly from the Diamond Development Initiative (DDI) representative, who outlined the fundamental needs of the smaller producers, whose requirement for immediate income often overshadowed their negotiation skills for fair market value.A recognised valuation mechanism to determine real value, which could be applied to all operators, would be welcomed broadly by the DDI.
Antwerp World Diamond Centre president Stephane Fischler welcomed the opportunity created by Sulayem to focus on a critical aspect supporting the mission of the KP and bringing this series of seminars to Antwerp. “Ensuring proper return on the export of diamonds, especially so for the most challenged KP member countries, the alluvial producers, is key to the sustainability of our common efforts.
“The discussions have produced interesting avenues, all converging towards the need of building expertise and capacity whilst ensuring solid governance processes,” she noted.
The workshop also identified a range of methods that could be adopted focusing in detail on reverse engineering based on the retail price of polished diamonds.
Reverse engineering is a method where the valuator will base his decision on the forecast of polished output of the stone applying a certain percentage of fixed costs, generally 15 percent including polishing and certain margins.
Tenders and auction experts gave their opinion about price fluctuations and market forces, as well as sighting seasonal influences, all having an impact on final valuations.Mining Weekly
Gov’t swiftly acts on BMC
Government has moved swiftly to place Botswana Meat Commission under the care of a management firm; the move is meant to put the Commission into shape both operationally and financially.
This was disclosed by Finance and Economic Development Minister, Dr Thapelo Matsheka, further stating the BMC is technically insolvent despite having received nearly P1billion as a bailout in recent times. The new management company will run BMC, which is based in Lobatse starting on the 2020/2021 financial year.
The finance minister made it crystal clear that, the move to appoint a caretaker firm for BMC was made to protect the interests of all stakeholders, including farmers. According to Matsheka, the Minister of Agriculture Development and Food Security, Dr Edwin Dikoloti will provide more details on the BMC changes in due course during his committee of supply speech. Government is also proceeding with the conversion of BMC to a company under the Companies Act following the approval of BMC Transition Bill and subsequent repeal of the old Act.
The repealing of the BMC Act has since eliminated the monopoly of the Commission when it comes to beef and cattle export. The repeal has also enabled government to establish a beef regulator which will be responsible for regulating the beef and the cattle sector. “Another aspect of the transition is the ultimate privatization of BMC.
The objective of the privatization of BMC is, among others, to engage the private sector in the ownership and management of the BMC to achieve operational efficiency and profitability, as well as reduce Government’s future financial commitments in the entity. This would be an important process in the transformation of the beef and cattle sector,” noted Matsheka. BMC which is 100 percent owned by government has been operating with losses for many years due to internal and external challenges such as poor supply and Foot and Mouth Disease(FMD).
BSE invite companies for CSD project
Botswana Stock Exchange (BSE) has intentions to implement a new Central Securities Depository (CSD) system by the second quarter of next year.
Authorities at the bourse have already put out a call for companies to perform a post migration data verification and quality assessment from the current depository system to a new depository system set to go live in the first half of 2020.“As part of the project, the BSE is to migrate master data and reference data from the current system to the new CSD system,” said BSE in a statement released this week.
According to BSE, the project will include comprehension of the BSE Data Migration Strategy and Plan and data mapping design and rules, review of the data migration ETL processes, data quality verification completeness, accuracy, consistency, definition and scope of data to migrate. In addition, BSE said it will migrate only active or open transactions in the current system to the new system. The scope of open transactions includes active or running corporate actions, active investor accounts, investor account balances above zero, active participants, active issuers and active instruments.
Meanwhile, BSE Chief Executive Officer, Thapelo Tsheole is on record citing that the new CSD system comes with functionalities such as securities borrowing and lending (SBL), management of the settlement guarantee fund, initial public offering (IPO) processing, e-voting for listed entities, repo management and online investor access.
Commenced in the first quarter of 2019, the project is also an integral element of the ongoing single CSD project pioneered by the Ministry of Finance and Economic Development, Non-Bank Financial Institutions Regulatory Authority and BSE.
The system is also expected to help increase the CSD system ratings by Thomas Murray, an assessment of which will be conducted once the system has been commissioned in early 2020.