Botswana and De Beers have finalized a new 10-year sales agreement, allowing Botswana to sell 30% of mined diamonds, increasing to 50% by 2035. This strategy aims to recover declining diamond revenue, which has dropped to $4.2 billion in 2023 from $7 billion. The deal is set to be finalized by the end of February, with an option for five-year renewal.
Botswana has secured a new 10-year diamond sales agreement with De Beers, following extensive negotiations that began in 2019. The agreement allows Botswana’s government to initially market 30% of the rough diamonds extracted from their joint venture, with plans to increase this share to 50% by 2035. This deal aims to counter a significant drop in diamond revenue, which fell from $7 billion to $4.2 billion in 2023 due to decreasing demand.
Historically, Botswana has relied heavily on diamond exports as a vital source of national income. The decline in revenue has raised concerns about the long-term sustainability of this dependence, prompting the government to negotiate a higher share of diamond sales from the De Beers partnership. This new agreement signifies a strategic shift aimed at stabilizing and increasing Botswana’s profitability in the competitive diamond market.
In conclusion, the recently finalized agreement between Botswana and De Beers marks a significant step towards revitalizing the diamond sector, ensuring the government’s share of diamond sales increases over the next decade. With supportive responses from industry leaders, this partnership reflects a commitment to fostering a stable and profitable diamond industry amid changing market dynamics.
Original Source: www.africa.com