Botswana and De Beers have officially signed a long-awaited diamond sales agreement, months after the initial deadline for renewal in June 2023.
Botswana’s newly elected president, Duma Boko, confirmed that the deal was finalized on January 24, as reported by Bloomberg. Speaking at an energy conference in Dar es Salaam, Tanzania, Boko stated, “The issue with De Beers has been settled.” However, De Beers has yet to release an official statement.
Just a day earlier, at the World Economic Forum in Davos, Switzerland, Boko indicated that negotiations were near completion, with only minor details remaining. The final agreement was reached the next day but only publicly disclosed this week.
The revised deal closely mirrors the terms previously negotiated—but never formally signed—by former President Mokgweetsi Masisi. Under the agreement, Botswana’s share of diamonds from Debswana, the 50-50 joint venture with De Beers, will increase from 25% to 50% over the next ten years.
Additionally, De Beers has secured an extension of its mining rights in Botswana until 2054 and has committed to investing up to $825 million over the next decade to support the country’s economic diversification beyond diamonds.
A Vital Deal for Both Sides
The agreement is pivotal for both Botswana and De Beers. Diamonds have been the backbone of Botswana’s economy since their discovery at Orapa in 1967, just months after the country’s independence from Britain. Today, the diamond industry contributes approximately 80% of Botswana’s export earnings and a third of its national budget.
For De Beers, Botswana remains an irreplaceable asset, accounting for roughly 70% of its global rough diamond supply. However, the global downturn in the diamond market has hit Botswana hard, with Debswana’s sales plunging by 52% in the first three quarters of 2024.
As both parties move forward under this newly signed agreement, the focus will be on navigating market uncertainties while ensuring that Botswana’s diamond wealth continues to fuel long-term economic growth.
Disclaimer: This information has been collected through secondary research and TJM Media Pvt Ltd. is not responsible for any errors in the same.
