The elevation of Debswana Run of the Mine production entitlement from 25 percent to 50 percent is poised to transform Okavango Diamond Company (ODC) into a noteworthy global player, amplifying its contribution from slightly over 5 percent to 10 percent of the global rough diamonds market.
ODC Managing Director (MD), Mmetla Masire, announced during the company’s 10th-anniversary commemoration that this allotment boost will propel annual production from 6 million carats to 12 million carats over the next decade. Masire envisions ODC capturing over 10 percent of the global rough diamond sales by 2033.
“We have embarked on a journey that will shape the next 10 years and beyond. The roadmap and strategy are outlined in the ODC 2023 – 2026 plan, initiated on April 1st this year.”
Highlighting ODC’s crucial role in actualising President Mokgweetsi Masisi’s vision for Botswana’s diamond industry, he underscored its influence on the country’s beneficiation strategy and active engagement throughout the diamond value chain. In October 2023, ODC initiated its inaugural Citizen Only Tenders, named 3P3E, with another slated for December 14. Masire envisions broadening sales channels in 2024 through contract sales and strategic partnerships.
“We look forward to diversifying the ODC sales channels in 2024 and beyond. We can expect to see contract sales and strategic partnerships from 2024 onwards,” Masire said.
From humble beginnings of generating annual revenue under US$100 million to over US$ 1 billion, Masisi described the establishment of ODC as a significant step forward.
Speaking during the celebrations, Masisi said this marked the nation’s commitment to enhancing the beneficiation of its diamonds and ensuring that it can sell and market precious resources right here in Botswana.
“It was a statement that we are not merely exporters of raw materials but active participants in the global diamond industry,” Masisi said.
When the COVID-19 pandemic hit, the Okavango Diamond Company faced challenges, like many other businesses, as their projects and funding were temporarily disrupted. However, Masisi said the company’s resilience, adaptability, and unwavering commitment to its mission allowed it to thrive during and after the pandemic.
In 2020, when ODC increased its diamond production entitlement from 15 percent to 25 percent, it took advantage of the dual viewing opportunity by hosting diamond viewings in two countries outside of Botswana, namely the United Arab Emirates and Belgium, consecutively.
“This was a first-of-its-kind move that further secured the company’s future,” Masisi said.
According to Masire, the way the company was structured and constituted would have meant that it would have been a loss-making organisation and would have been dependent on government subvention for survival.
“It was registered as a company limited by guarantee like clubs, associations and non-profit organisations. It would not pay any dividends and would be on life support from day one. This was identified on time and the company was re-registered to operate as a private company thus allowing it to develop profitable and competitive strategies.”
ODC was given the initial working capital loan by the shareholder. This was the first and last time that Government gave ODC a loan and that loan was paid back. However, for the benefit of the market, especially the financing institutions, Government provided a USD 100 million guarantee.
Masire said ODC has never drawn down on this guarantee. Its significance was that it enabled ODC to negotiate good credit facilities with banks with favourable rates and terms. This gave birth to the partnership between ODC and Standard Chartered Bank.
“In the early years, our resilience in the face of unique challenges set the stage for the growth we’ve experienced,” Masire said.
ODC was poised for its inaugural sale in June/July 2013. The primary challenge highlighted by Masire was a lack of trust when attempting to enter the market.
“ODC started with a few trusted customers and soon became known and trusted, and now they are amongst the most trusted and transparent rough diamond seller.”
Another challenge was that India did not initially recognise ODC as a mine and wanted to impose import duty. This hurdle was resolved by negotiating with the Reserve Bank of India. How more challenges remained. Another challenge was that USD payments to Botswana were taking 2 days and Standard Chartered Bank was able to negotiate that payments to Botswana be pre-cleared and have payments processed in 1 day.
Masire also said ODC did not have access to a price book.
“There was zero historic data. A detailed analysis of various systems was done, and this is how we ended up with the Spot Auction.”
But from a modest beginning with just about 25 registered customers, the company now stands at over 600 registered customers in 2023. From the humble beginnings of generating revenues below US$100 million in annual diamond sales revenues, ODC generates sales revenues of over US$1 billion annually.
“We’ve overcome obstacles, adapted to market dynamics, and consistently strived for excellence.”
ODC broke the world record for the largest one-day Diamond Auction sale ever conducted for rough natural diamonds in September 2021 to generate sales revenues of US$123 million for a one-day.
The following year, ODC broke the world record again for the largest one-day Diamond Auction sale ever conducted for rough natural diamonds in February 2022 to generate sales revenues of US$182 million for a one-day Diamond Auction sale.
In 2022 the Okavango Blue was on display at the American Museum for Natural History. This was a great exposure for ODC and the Okavango Blue.