Botswana Minister of Mineral and Energy Bogolo Joy Kenewendo (Left) and De Beers' CEO Al Cook announce they have concluded negotiations on extending their rough diamond production and sales agreement. Picture: Edward West/ Independent Newspapers
The Botswana government and De Beers announced on Monday that they have established a new sales agreement for De Beers’ rough diamond production, after more than five years of negotiation and within 100 days of the election of a new government in that country,
The agreement, to be signed officially within a short period, and on conclusion of the award of mining licenses, is in alignment with the Heads of Terms agreed on September 30, 2023, and the long standing negotiations were concluded on Friday, Botswana Minister of Mineral and Energy Bogolo Joy Kenewendo said yesterday at the Investing in African Mining Indaba in Cape Town,
Debswana is a 50:50 joint venture between the government of Botswana and De Beers and operates several diamond mines in the country: Jwaneng, Orapa, Letlhakane, and Damtshaa.
She said it was hoped the agreement would help the country and De Beers tackle the structural challenges facing the diamond mining industry, and the agreement would allow for a Pula 1 billion (about R1.34 billion) to be set aside for development, outside the diamond mines.
A key feature of the agreement was that the diamonds would be marketed as natural diamonds from Botswana, which would be the first time that a country of origin would be used in the marketing of diamonds.
In addition, she said the agreement allowed, also for the first time, for the establishment of a jointly owned diamond market company, owned by the Botswana government and De Beers. Traditionally, De Beers has marketed the diamonds itself, globally.
De Beers CEO Al Cook said the agreement entailed extending the partnership between De Beers and the Botswana government, something he termed was likely the “greatest public private partnership on Earth”, by another ten years, with the option to extend it by another five years. The first diamond was found in Botswana in 1947.
He said both parties would sign the agreements following the issuance of new mining licences by the appropriate regulatory authorities in Botswana and final governance approvals.
Until the execution of these new agreements, the terms of the existing agreements would continue to remain in effect.
The new collaboration was centred around the responsible recovery, marketing, and sale of diamonds, ensuring the sustainability of the global diamond industry while enhancing the significant fiscal and societal contributions that diamonds provide to Botswana.
Botswana's government changed on November 1, 2024 when Duma Boko was sworn in as the new president. His party, the Umbrella for Democratic Change (UDC), won a landslide victory in the elections, ending nearly 60 years of rule by the Botswana Democratic Party.
According to previous reports, in 2024, Botswana's diamond production was about 17.8 million carats, a significant decrease from the previous year due to various factors, including higher-than-expected inventory levels and a protracted recovery in global demand for diamonds.
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