Botswana's Diamond Share to Double in New De Beers Agreement
July 02, 23
(IDEX Online) - The Botswana government is to see its share of De Beers diamonds double from 25 per cent to 50 per cent over the next 10 years, after both sides reached a last-minute agreement on Friday (30 June).
Botswana's President Mokgweetsi Masisi had repeatedly threatened to walk away from the deal unless De Beers agree to more favorable terms - reportedly the 50 per cent figure.
In a press release issued at around 6pm local time on Friday, deadline day, after negotiations finally ended in agreement, De Beers spoke of a "transformational new agreement"
A day before the agreement was reached Lefoko Moagi, the government's minerals and energy minister said both sides were "working around the clock" to conclude a deal.
The new agreement will represent "a new chapter in an enduring diamond partnership", according to a joint communique.
The state-owned Okavango Diamond Company (ODC) will, with immediate effect, receive a 30 per cent share (up from 25 per cent) of the diamonds recovered by Debswana, which is jointly owned by De Beers and the Botswana government.
That figure will rise over 10-year life of the agreement, reaching 50 per cent by 2033.
Both sides have also agreed to extend Debswana's mining licenses for a further 25 years.
Under the original 1969 agreement, the Botswana government received just 10 per cent of the diamonds.
It's taken four years of negotiations to reach this new agreement, and there is a sense of relief on both sides.
Al Cook, CEO, De Beers Group, said: "For De Beers it is a privilege to renew our half-century partnership with the people of Botswana.
"It is a partnership that is highly regarded around the world for the enduring role it has played in creating economic development and growth.
"Our transformative agreement reflects the aspirations of the country, secures the future of our Debswana joint venture, and reaffirms De Beers' leadership position for the long-term.
A joint communique from De Beers and the Botswana government said both sides were "pleased to announce they had reached an agreement in principle on a new 10-year Sales Agreement for Debswana's rough diamond production through to 2033, and new 25-year Debswana mining licences through to 2054."
The current agreement will remain in place until implementation of the new agreements are finalized.
De Beers also said it would progress the long-term capital investment required to secure Debswana's position as one of the world's leading diamond producers, and Botswana's largest private employer, for decades to come.
It will invest up to $750m over the next 10 years in a Diamonds for Development Fund, aimed at accelerating Botswana's economic diversification.
And it says it will create the potential for tens of thousands of new jobs in the diamond industry and emerging sectors.
Pic shows Al Cook, CEO De Beers Group and Lefoko Moagi, Botswana government's minerals and energy minister