Botswana and De Beers have finalized a sales agreement, originally due for renewal in June 2023. The deal enhances Botswana’s diamond share to 50% and extends mining licenses until 2054, requiring De Beers to invest $825 million in the country’s economy over ten years. With diamonds equating to 80% of Botswana’s export earnings, this deal is essential for economic stability amidst declining sales.
Botswana and De Beers signed a significant sales agreement on January 24, 2025, resolving a renewal that was originally due in June 2023. President Duma Boko announced the finalization during an energy conference in Dar es Salaam, Tanzania, as De Beers has yet to release a formal statement regarding the agreement.
During the World Economic Forum in Davos on January 23, Boko indicated that the deal was imminent, requiring only a few minor adjustments. The reached agreement is expected to mirror the one proposed by former President Mokgweetsi Masisi but left unsigned.
Key aspects of the deal include increasing Botswana’s diamond share from 25% to 50% over the next ten years, extending mining licenses until 2054, and committing De Beers to invest up to $825 million in Botswana’s economic development beyond the diamond sector.
This agreement is vital for both parties, as diamonds have profoundly impacted Botswana’s economy since their discovery shortly after the nation gained independence in 1966. Currently, diamond revenues account for approximately 80% of the country’s exports and one-third of the national budget.
In contrast, about 70% of De Beers’ rough diamond supply originates from Botswana. However, a global economic downturn has significantly affected the diamond sector, with sales from Debswana reportedly falling by 52% during the first three quarters of 2024.
The signing of the agreement between Botswana and De Beers marks a critical development in the diamond industry, ensuring Botswana’s increased share in diamond revenues and extended mining licenses. The investment commitment from De Beers also indicates a shift towards diversifying Botswana’s economy beyond diamonds. Both parties will benefit from the stability this deal provides against the backdrop of a challenging global market for diamonds.
Original Source: www.idexonline.com
