The agreement signed between the Botswana government and De Beers, allows the country to have an increased share of 30% of diamond production for sale through the state-owned Okavango Diamond Company.
The share will progressively increase to 50% in the final year of the contract.
Currently, the Okavango Diamond Company receives 25% of Debswana’s production.
‘We will take it bit by bit because if we just do that all at once without a proper plan about how to sell the diamonds, the price in the market would fall. But we have told ourselves that we will not go beyond ten years without getting to that 50%,” Permanent Secretary to Botswana’s President, Emma Peloetlets was quoted by Bloomberg.
The new agreement includes a provision for a 10-year period to sell the rough diamonds produced by Debswana, a joint venture equally owned by the government and De Beers. It also extends the mining licenses for 25 years.
Negotiations between De Beers, a unit of Anglo-American Plc, and Botswana’s government began in 2018 after the previous agreement expired in 2020.
The negotiations were extended several times due to disagreements over the supply Botswana should receive and tensions concerning the role of Belgian gem trader HB Antwerp, which has established a close relationship with the government.
Earlier this year, Botswana announced its acquisition of a 24% stake in the company, without disclosing the amount paid, and revealed plans to obtain some supply from ODC.
President Mokgweetsi Masisi has been increasingly vocal in his criticism of the 54-year-old agreement and threatened to withdraw if it didn’t provide more benefits to his country, including a larger allocation of the gems produced there.
