Botswana, De Beers sign long-delayed diamonds deal

GABORONE: Botswana’s government on Tuesday signed a long-delayed 10-year diamonds sales agreement with Anglo American unit De Beers adding a possible extension period of five more years to the provisional pact.

Under the final deal, the share of Botswana’s state-owned Okavango Diamond Company (ODC) in the production of Debswana – its 50-50 joint venture with De Beers – will reach 40% at the end of the agreement, revised from a provisional 50%.

ODC’s allocation could, however, rise to 50% during the proposed five-year extension period, according to a joint statement by Botswana’s government and De Beers.

During the first five years, ODC will sell 30% of Debswana’s output, up from 25% previously.

The provisional agreement reached with Botswana’s previous government had ODC’s allocation reaching 50% at the end of the 10-year pact.

Negotiations over the deal started in 2018 and an agreement announced in 2023 was never formally signed.

Botswana’s President Duma Boko, who swept to power last October, made signing the deal with De Beers a priority.

The deal is critical for the southern African country since its economy is largely dependent on the export of diamonds.

“We have us a good deal and we trust that it will carry us into the future. To the people of Botswana, this agreement is about you, about the jobs it will create,” Boko said at a signing ceremony in the capital Gaborone.

Under the agreement, Debswana’s mining licences, which were due to expire in 2029, will be extended until 2054.

Botswana’s government says the economy contracted last year because of a prolonged downturn in the global diamond market.

Declining demand and a supply glut, the rising popularity of lab-grown diamonds and a shift by younger consumers away from the precious stone, have all weighed on rough diamond prices.

However, the government hopes the economy will rebound this year because of an improvement in the global diamond market and a better performance of other sectors.