Botswana has signed a pivotal 10-year diamond sales agreement with De Beers, allowing for a five-year renewal. The deal modifies the share of the Okavango Diamond Company in Debswana’s output, aiming to increase it over time. The agreement further extends mining licenses until 2054, amidst hopes for economic recovery.
On Tuesday, Botswana’s government formalized a significant 10-year diamond sales agreement with De Beers, an Anglo American subsidiary, which includes the option for a five-year extension. This long-awaited deal revises the Okavango Diamond Company’s share in Debswana’s output from a provisional 50% to 40% by the agreement’s end, but could rise back to 50% during the extension period. Over the first five years, the share of Debswana’s output allocated to the Okavango Diamond Company will increase from 25% to 30%.
Negotiations for this deal, which began in 2018, faced delays; a previous provisional agreement with the former government had established different terms. Botswana’s President Duma Boko prioritized the signing, asserting that the agreement is vital for the country that heavily relies on diamond exports. Boko emphasized the deal’s significance for job creation and economic stability in the signing ceremony held in Gaborone.
Notably, the agreement stipulates an extension of Debswana’s mining licenses, originally set to expire in 2029, until 2054. Despite a contraction in Botswana’s economy linked to a downturn in the global diamond market, government officials are optimistic that conditions will improve this year due to fluctuations in diamond demand and other sectors’ performances, promising a rebound.
The recently signed diamonds deal between Botswana and De Beers marks a critical development for the nation’s economy, which is significantly dependent on diamond exports. While the agreement modifies the Okavango Diamond Company’s share in Debswana, it is expected to drive job creation and assist in economic recovery. Overall, the move reflects a commitment to enhancing Botswana’s diamond market stability and economic growth.
Original Source: money.usnews.com
