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Paper short abstract:

For many years, De Beers resisted calls for diamond beneficiation in Botswana.Eventually, the company agreed to beneficiation. Analysed through neo-Gramscian theory, De Beers' change of approach amounted to a passive revolution that sought to preserve the company's hegemony in the diamond industry.

Paper long abstract:

For many years, De Beers, the world's leading diamond mining and marketing company, resisted calls for diamond beneficiation and the relocation of some of its operations from London to Botswana, the largest diamond producer by value in the world, and also a shareholder in De Beers. Among others, De Beers argued that beneficiation activities, such as diamond cutting, polishing and even jewellery manufacture, were not viable in Botswana because of high labour costs. However, from the early 2000s, De Beers softened its position and in 2008, the Diamond Trading Company Botswana (DTCB), the largest rough diamond sorting and valuing company in the world, was opened in Gaborone, the capital city of Botswana. This article interrogates De Beers' decision to embrace diamond beneficiation in Botswana, and deploying the neo-Gramscian theory of International Political Economy argues that De Beers' change in approach could be conceptualized as a passive revolution. This passive revolution had two objectives. Firstly was to appease Botswana, and thus ensure that the country is not tempted by De Beers' rivals. Indeed, at the time, De Beers' position as the leading diamond company was under threat from rivals such as Rio Tinto and Alrosa among others. Secondly, and perhaps more importantly, this passive revolution sought to maintain De Beers' dominant position in the international diamond industry. In fact, without Botswana, De Beers would lose its status as the largest and richest diamond company in the world.