Gem trader HB Antwerp eyes African diamonds after Botswana pact

Lucara Diamond

19/05/2023 09:56

* 
      Says S. Africa, Namibia, Lesotho interesting markets
    

        * 
      Sees sales jumping to $1 billion in four years
    

  
    By Felix  Njini
       May 19 (Reuters) - 
    HB Antwerp, a Belgian gem processing firm and trader, is
hunting for more deals in Africa after securing a sales pact
with Botswana, the world's No. 1 diamond producer by value.
    The firm is looking for potential deals to process rough
diamonds in countries including Namibia, South Africa, Lesotho
and the Democratic Republic of Congo, said Rafael Papismedov,
one of HB Antwerp's co-founders. 
    It has held initial talks and plans to enter into serious
negotiations with countries that are keen to raise their
industry governance status to the same level as Botswana's,
Papismedov said. 
    He declined to disclose which governments HB Antwerp has
held talks with but said Namibia, South Africa and Lesotho are
"very interesting" markets.
    "There is initial talks with a lot of governments but
currently our focus right now is Botswana," Papismedov said in
an interview. "We hope to start engaging in serious discussions
in 2024."
    Founded in 2020, HB Antwerp's deal with Lucara Diamond Corp
 LUC.TO , allows it to buy gems of 10 carat quality and above
from the Canadian producer's Karowe Mine in Botswana at prices
based on the estimated polished outcome of each diamond. 
    The Botswana government said it is buying a 24% stake in HB
Antwerp and as part of the deal state-owned Okavango Diamond
Company will supply the gem trader and processing firm with an
undisclosed quantity of rough diamonds for five years.
    Botswana is currently locked in negotiations with De Beers
Group to renew a 2011 diamonds sales and marketing agreement
which expires in June. 
    More supplies of rough diamonds could help HB Antwerp boost
sales to over $1 billion per annum in three to four years from
under $300 million last year, Papismedov said.
    "We are a very ambitious company," he said. 
    HB Antwerp has rapidly expanded its operations and
capitalises on selling bigger stones but is "still a relatively
new company with a limited track record", diamond analyst Paul
Zimnisky said. 
    Producers from Africa, Canada and Australia also face
difficulties competing in the rough-to-polished manufacturing
segment against India, he said.
    "The Indians have the infrastructure, skill sets and labour
costs that are world-leading in terms of diamond manufacturing,
this is why over 90% of the world’s diamonds are cut and
polished in India," he added.
    Processing more diamonds in African countries could help
shore up government revenues, create jobs and bolster
transparency, Papismedov said. 
    "We believe that all the diamonds of Botswana and all the
diamonds of the African nations should be transformed locally." 
  
      
 
 
 
 

 (Reporting by Felix  Njini; editing by Jason Neely)
 ((Felix.Njini@thomsonreuters.com;))