De Beers and Botswana have confirmed a new sales agreement that will increase the government’s share of rough diamonds from 25% to 30%, eventually reaching 50% by 2035. The deal also extends mining licenses past 2029, providing a framework for economic diversification through the Diamonds for Development Fund. CEO Al Cook noted the agreement’s importance for both parties and the diamond industry at large.
De Beers has confirmed that a new agreement with Botswana has been finalized, increasing the proportion of the country’s rough diamonds allocated to the government over the next decade. Initially announced in July 2023, the agreement will see the share of rough diamonds sold through Botswana’s Okavango Diamond Company (ODC) rise from 25% to 30%, eventually reaching 50% by 2035. Additionally, this deal extends Debswana’s mining licenses beyond 2029 and includes financial contributions to Botswana’s “Diamonds for Development Fund” to support economic diversification.
De Beers stated that the current agreement terms are largely unchanged from those discussed previously in 2023. Debswana operates three active mining sites: Jwaneng, Orapa, and Letlhakane, with Jwaneng being the world’s richest diamond mine by value. Future operational timelines indicate Orapa will function until 2037, Letlhakane until 2043, and there are plans for Jwaneng’s transition to underground mining to extend its life to at least 2050.
This new agreement replaces a decade-long sales contract that commenced on January 1, 2011, which had seen multiple extensions due to the pandemic and ongoing negotiations with local leadership, including former President Mokgweetsi Masisi. Following a significant election in late October 2024, Duma Boko replaced Masisi and reiterated the importance of finalizing the deal with De Beers. Until new agreements are signed, existing terms will continue.
CEO Al Cook emphasized the significance of this agreement for both De Beers and Botswana and its potential impact on the global diamond industry. He stated that the partnership would help promote the demand for ethical, natural diamonds. This development aligns with the broader goal of ensuring the sustainability and growth of local resources while enhancing the economic landscape of Botswana.
The agreement between De Beers and Botswana is crucial for the economic development of Botswana, primarily through its diamonds, a significant natural resource. The new sales agreement reflects a shift towards increased local ownership of diamond resources and aims to leverage diamond sales for broader economic benefits. Additionally, Botswana’s economy has been linked to the diamond industry for decades, influencing economic policies and development goals. The ongoing discussions highlight Botswana’s need to adapt its economic strategies following a change in political leadership.
The finalized agreement between De Beers and Botswana marks a pivotal moment for the diamond industry in the region, enhancing government participation in diamond sales and extending mining licenses. As a result, Botswana aims to diversify its economy through the Diamonds for Development Fund. This partnership promises sustainability and economic benefits for both De Beers and the Botswana government, reinforcing their commitment to ethical diamond production and local economic empowerment.
Original Source: nationaljeweler.com
