Botswana has reached a diamond extraction and sales agreement with De Beers, marking a crucial step toward securing the future of its gem-driven economy.
The parties secured the conditions of the deal just before midnight on January 24 and will formally unveil them soon, Botswana President Duma Boko said Tuesday, according to a Bloomberg report. Diamonds remain the cornerstone of Botswana’s economy, with Debswana — a partnership between the government and De Beers — responsible for most of the nation’s diamond production.
Boko had previously indicated to Reuters at the World Economic Forum in Davos, Switzerland, that a resolution was approaching.
In his election campaign, the president criticized former leader Mokgweetsi Masisi’s approach to the negotiations, suggesting that De Beers had considered abandoning the deal under the previous administration. Since unseating the Botswana Democratic Party, Boko’s leadership under the Umbrella for Democratic Change coalition has concentrated on rebuilding relations with the diamond-industry titan.
While the contract secures the long-standing partnership between Botswana and De Beers, Boko noted that the terms had not undergone major changes, only minor adjustments. According to the transitional framework the previous government outlined, state-owned trader Okavango Diamond Company )ODC( was set to receive 30% of Debswana’s output, with the government getting BWP 10 billion ($720 million) for national development.
Despite reaching a consensus, the parties have yet to sign the deal, as both are waiting for the new government to settle in before finalizing the agreement, sources told Rapaport News.
With the global diamond market facing challenges from economic downturns and competition from lab-grown stones, Botswana plans to emphasize the provenance of its gems to maintain their value.
“We appreciate the threat posed by lab-grown diamonds. I don’t want to give them the privilege of calling them diamonds. Diamonds are natural,” Bloomberg quoted Boko as saying. “We will then market our diamonds in terms of their provenance and of the story behind the diamond.”
Botswana has long leveraged its diamond wealth to drive economic development, positioning itself as Africa’s richest nation per capita. The latest deal with De Beers aims to provide stability as the country navigates the evolving global gem market.
Image: The De Beers sightholder office. (Ben Perry/Armoury Films/De Beers)
