De Beers and Botswana Reach Agreement Over Jwaneng License

De Beers and Botswana said today (Monday) they have reached agreement over the renewal of the crucial Jwaneng mining license, thus ending months of tension between the sides.

The license will be renewed for a period of 25 years from August 1, 2004, as will those for the Orapa, Damtshaa and Letlhakane mines.

Jwaneng is the world’s largest and most profitable mine, producing some $1.4 billion worth of diamonds a year and is operated by Debswana, a 50/50 joint venture of the government of Botswana and De Beers.

The mine opened in 1982 and has produced 14.3 million carats out of Botswana’s total production of about 30 million carats.

While it was clear that Botswana had no choice but to renew the license with De Beers, analysts said it was equally obvious that Botswana wanted a more lucrative agreement than the previous one, thus drawing out negotiations.

Meanwhile, with effect from the same date, Botswana and De Beers have agreed that the effective 15 percent holding of the equity of DB Investments SA previously owned by Debswana be ceded to and directly owned by Botswana.