December 12th, 2005
By Charles Wyndham.
The news that Botswana has gone and issued three licences really has driven a coach and horses through De Beers Supplier of Choice (SoC).
The sheer bureaucratic lunacy of all these non-sensical rules enmeshing sightholders has been torn apart by the Botswana government.
In this case it was that no sightholder was allowed more than one Southern African sight. Why this should be so from any sound business sense has always passed me by.
However, the decision by the government is I believe of even greater significance than simply consigning SoC to the intellectual dustbin.
Botswana knows that it is in the driving seat, and this is the clearest indication that it is going to make those long term decisions to protect its resource; rather, than rely on the frantic day to day ‘yo yoing’ that we have witnessed from De Beers as it lurches from one crisis to another, twisting itself and its clients into more and more convoluted and unprofitable knots.
Botswana, not unreasonably, wants the strongest clients, whether they have one or more sights is irrelevant to them. In fact, it is presumably a recommendation, if an inconvenience for DTC.
The DTC is going to be moving to Botswana quicker than most realise, where what is rather inelegantly called the ‘aggregation’ of the goods is going to take place, and even before that some sights may take place.
More and more key roles are going to be taken by the Botswanans.
Times have changed and the only people who seemed not to realise it were the DTC / De Beers.
How else can one explain them getting this custard pie in the face, by having their list pushed aside and the choice made by the Government. The presumption is that they have failed miserably to take their partners along with them.
This failure is compounded by the breakdown in trust which has resulted in the disheartening piece of legislation in South Africa.
De Beers is going to have a less than easy ride in renewing its marketing agreement in Namibia, though renew it almost certainly will.
All we know now is who is the fly and who is the spider.
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