"Significant Restructuring": HB Antwerp Scales Back Botswana Operations

(IDEX Online) - Belgian diamond company HB Antwerp is scaling back its Botswana operations after a promised supply of rough diamonds from state-owned Okavango Diamond Company (ODC) failed to materialize.

HB is undergoing "significant restructuring" after it failed to receive the rough diamonds envisaged under a 2023 agreement with the Botswana government, managing partner Boaz Lev told Reuters.

"We are performing restructuring and resizing work to match with what we currently have, since whatever was foreseen in 2023 has not materialised to date," Lev said.

The agreement was announced by former Botswana president Mokgweetsi Masisi in March 2023, when the government said it would acquire a 24% stake in HB Antwerp and that ODC would supply HB Botswana with 10% of its rough diamonds for five years.

The agreement was seen at the time as at part of Botswana's effort to take a greater role in the downstream diamond industry.

The government said the arrangement would allow more diamond value to be captured inside Botswana through cutting and polishing, technology and skills development. But the proposed investment subsequently stalled.

In 2024, Botswana said it was considering increasing its proposed stake in HB to 49.9% without increasing its planned investment, as the downturn in the diamond market reduced the company's valuation.

But the new Botswana government appeared to be cooling on the investment after Masisi was defeated in the October 2024 election. Minerals and energy minister Bogolo Kenewendo said there was "nothing really to progress" because no agreement had been signed.

The latest development concerns the rough-diamond supply arrangement rather than simply the proposed equity investment.

Lev told Reuters on September 25 that consultations over the restructuring had been under way for about two months and were expected to conclude within days. He did not disclose how many jobs would be affected.

The company had warned Botswana's labor authorities in December that it could cut up to 80% of its workforce if it did not receive ODC rough diamonds by the end of March 2026, according to a report in the Botswana Gazette.

HB has invested more than $10 million in technology and infrastructure in Botswana, and recruited dozens of local graduates, many of whom were sent abroad for specialized training.

Lev said none of the machinery would be returned to Belgium and that the employees who remain would be able to operate the equipment.

HB's Botswana operation was built around a model that seeks to value rough diamonds according to their estimated polished output rather than conventional rough-market prices.

The company has used that approach with Lucara Diamond's Karowe mine, buying stones of 10.8 carats and above. HB says the model has enabled Lucara to achieve prices about 40% higher than it would receive through conventional rough-diamond market sales.

Pic courtesy HB Antwerp.