icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm
2 Jul, 2023 10:56

Major African diamond producer secures new deal with De Beers

The new agreement gives Botswana a bigger share of rough stones from the joint venture with the consortium
Major African diamond producer secures new deal with De Beers

Botswana has reached a new ten-year agreement for the sale of rough diamonds with De Beers, the country’s government and the company announced in a joint communique on Friday. Botswana’s diamond industry is completely controlled by a joint venture between the government and De Beers called Debswana.

According to the announcement, the parties agreed to extend the sales deal for Debswana’s rough diamonds through to 2033, and to prolong Debswana’s mining licenses until 2054.

Done Deal! The transformational new agreements between the government of Botswana and De Beers reflect the aspirations of the people of Botswana,” Botswana President Mokgweetsi Masisi wrote in a Twitter post announcing the deal.

Although the parties own equal stakes in the venture, under the previous deal 75% of Debswana’s diamonds went to De Beers, while only a quarter went to Botswana’s state-owned trader Okavango Diamond Company (ODC). Masisi’s government has been trying to negotiate a new deal with De Beers for five years, pushing for a larger share of output and threatening to cut the company’s mining rights in the country, which were due to expire in 2029.

Masisi’s efforts have proven successful, as the new agreement gives the country a bigger share of rough stones from the joint venture. ODC will receive 30% of Debswana’s output from the start of the new contract, and its share will be gradually scaled up to 50% over the next decade.

The parties also announced the creation of a ‘Diamonds for Development Fund,’ to which De Beers will contribute the equivalent of $75 million at the outset and up to $750 million over the next ten years. According to the company, the fund will invest in “additional value to the Botswana economy” in order to “accelerate Botswana’s economic diversification” from diamonds.

Botswana was Africa’s second largest diamond producer in 2022, and the third-largest worldwide after Russia and the Democratic Republic of Congo. The country’s economy is heavily reliant on diamonds, from which it generates about 30% of its revenue and 70% of its foreign exchange earnings.

For more stories on economy & finance visit RT's business section