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Gaborone, Botswana – In a move hailed as a “groundbreaking” agreement, Botswana and De Beers have solidified their long-term partnership, securing the future of the nation’s diamond industry and promising a significant boost to its economic development.
After intense negotiations, the two parties have signed a new 10-year sales agreement, with the possibility of a five-year extension, and a 25-year extension of the mining licenses for their 50:50 joint venture, Debswana. This deal, extending to 2054, ensures De Beers’ continued access to some of the world’s richest diamond resources, while empowering Botswana to play a more prominent role in the global diamond market.
“We are proud to announce the signing of this landmark new agreement, which will underpin the success of our diamond industry as we enter an exciting new phase of Botswana’s sustainable economic development,” stated Honourable Bogolo Joy Kenewendo, Minister of Minerals and Energy for Botswana.
Al Cook, Chief Executive Officer of De Beers Group, echoed this sentiment, calling the agreement a “privilege” that secures their participation in “the world’s greatest diamond resources for decades to come.”
The new sales agreement will see Botswana’s Okavango Diamond Company (ODC) gradually increase its share of Debswana’s diamond sales. Initially, ODC will sell 30%, increasing to 40% in the second five years, and finally reaching a 50:50 split during the potential extension period. This arrangement also includes commitments from both De Beers and ODC to supply diamonds for local beneficiation, supporting Botswana’s efforts to add value to its natural resources.
Beyond the sales agreement, a significant package of development initiatives has been agreed upon, aimed at driving economic diversification and job creation in Botswana. A key element is the creation of the Diamonds for Development Fund, with De Beers committing an initial BWP 1 billion (approximately $75 million) and further annual contributions based on Debswana’s performance.
Furthermore, De Beers will invest in a diamond jewellery manufacturing facility, establish a diamond grading laboratory, and launch a vocational training institute, all aimed at enhancing local participation in the diamond industry.
To further boost the diamond sector, both parties have pledged to co-invest in marketing initiatives, aimed at stimulating demand and preserving consumer confidence in diamonds. This collaboration will see them jointly funding marketing programs in proportion to their respective shares of Debswana supply.
This comprehensive agreement marks a significant step in the long-standing partnership between Botswana and De Beers, ensuring that the nation’s diamond wealth continues to drive sustainable economic development for generations to come.
