Botswana, the world’s biggest diamond producer by value, has met a historic agreement with the De Beers Group to increase its share of rough stones from their joint venture, Debswana, in a momentous milestone for the global diamond industry.
The deal, announced on Saturday, outlines a gradual rise in Botswana’s share over the next decade, ultimately reaching 50 percent by 2033.
The Botswana government and De Beers confirmed that they had reached a 10-year sales agreement for Debswana’s rough diamond production, extending until 2033. Additionally, Debswana has been granted a 25-year mining license, which will remain valid until 2054.
As a joint venture between the Anglo-American unit and the Botswana government, Debswana had been selling 75 percent of its output to De Beers, while Botswana’s state-owned Okavango Diamond Co (ODC) received the remaining share of the stones.
Under the new contract, ODC will see a substantial increase in its share of the produce from Debswana, receiving 30 percent at the start of the agreement, with this proportion progressively rising to 50 percent in the contract’s final year. Both De Beers and the government jointly confirmed this arrangement in a statement, highlighting the move towards a sustainable partnership for both parties.
De Beers also pledged a significant investment in the Botswana economy, announcing a 1 billion pula ($75 million) commitment to a diamond fund.
The fund aims to bolster the value of Botswana’s diamond industry further, and the company indicated that the contribution would grow tenfold over the next ten years.
The negotiations leading to this landmark deal have been ongoing since 2018. Botswana’s President, Mokgweetsi Masisi, had been vocal about the need for a larger share of Debswana’s output. He had previously threatened to sever ties with the mining company if the government’s concerns were not adequately addressed in the new agreement.
In response to the agreement, De Beers emphasized the importance of this partnership in securing Debswana’s position as one of the world’s leading gem producers.
The De Beers Group has been operating in Botswana for 50 years, and the country heavily relies on diamond mining, with two-thirds of its foreign currency receipts originating from the diamond industry, sales, and related activities.
This newly established deal marks a significant step forward for Botswana in its quest to gain more control over its valuable diamond resources, fostering economic growth and sustainability for the nation in the years to come.