Quote from Alex bobby on February 6, 2025, 5:31 AM

Botswana and De Beers Secure Historic 10-Year Diamond Deal

Chief Executive Officer at De Beers Group, and Botswana's Minister of Mineral and Energy, Bogolo Kenewendo, meet for talks on a diamond deal at the Investing in African Mining Indaba in Cape Town, South Africa, Feb. 3, 2025.

The government of Botswana and South African diamond giant De Beers have successfully reached a groundbreaking 10-year sales agreement after prolonged negotiations that began in 2019. This deal, eagerly anticipated by the global diamond industry, cements Botswana’s position as the world’s second-largest diamond producer, trailing only Russia.

Key Terms of the Agreement

Under the terms of the new agreement, Botswana’s government will be allowed to sell 30% of the rough diamonds mined through Debswana, the joint venture between the country and De Beers. By 2035, Botswana’s share will increase to 50%, ensuring greater revenue and economic benefits for the nation.

The agreement aims to reverse a significant decline in Botswana’s diamond revenue, which once peaked at $7 billion annually but dropped to $4.2 billion in 2023 due to global downturns in diamond sales. The deal will allow Botswana to have more control over its diamond resources and expand its footprint in the international market.

A Shift in Negotiations

Speaking to journalists, De Beers CEO Al Cook expressed his satisfaction with the new agreement and commended the Botswana government for its role in ensuring a smooth conclusion to negotiations.

Under the leadership of former President Mokgweetsi Masisi, discussions were often tense, with Masisi even threatening to sever ties with De Beers. However, the negotiation process took a more collaborative turn following the election of President Duma Boko in November.

Elodie Daguzan, Executive Director of the World Diamond Council (WDC), welcomed the agreement, emphasising its significance for the stability of the diamond sector.

"The World Diamond Council is thrilled about this development, which underscores the importance of long-term, stable partnerships in the diamond sector. Botswana has been a leading example of how responsible diamond mining, through successful collaboration with the private sector, can drive sustainable growth," she said.

Implications for the Global Diamond Industry

The deal comes at a crucial time for the global diamond industry, which has faced challenges such as concerns over ethically sourced diamonds and cautious consumer spending. Additionally, the sector has been disrupted by supply chain issues following sanctions on Russian diamonds, making Botswana’s agreement with De Beers even more critical.

Hans Merket, a diamond industry researcher, emphasised the importance of the deal in stabilising the market.

"This agreement between the world’s largest diamond producer after Russia will be seen as a welcome development, not only for both parties but by the industry at large. Hopefully, it will enable the sector to continue advancing a more positive narrative, with diamonds contributing to development and well-being, offering a clear alternative to sanctioned stones from Russia," he stated.

A Bright Future for Botswana’s Diamond Industry

Botswana’s Minister of Minerals, Bogolo Kenewendo, confirmed that the government and De Beers will officially sign the agreement before the end of February. The deal also includes an option for a five-year renewal upon its conclusion in 2035.

This agreement represents a major milestone for Botswana’s economic future, ensuring that a greater share of its natural resources benefits its citizens. By securing a larger portion of diamond sales, Botswana is poised to enhance its financial stability and reaffirm its global standing in the diamond industry.

Conclusion

The 10-year diamond sales agreement between Botswana and De Beers is a landmark deal that ensures stability for the global diamond market while securing greater economic benefits for Botswana. With a gradual increase in its diamond sales share, Botswana is taking a proactive step towards long-term financial growth and industry leadership. This agreement not only strengthens the country’s economic prospects but also reinforces its reputation as a model for responsible resource management and sustainable development.

The Botswana’s Minister of Minerals, Bogolo Kenewendo, said her government and De Beers will officially sign the agreement before the end of February.

At the end of the new agreement in 2035, there is an option for a five-year renewal.