De Beers and the government of the Republic of Botswana have reached a new deal on diamond sales that will see Botswana's Okavango Diamond Company (ODC) receive up to 50% of Debswana production over the duration of the agreement. De Beers will also initially contribute about US$75 million to a Botswana development fund, which could total some US$750 million over the next 10 years.
According to a statement from De Beers, ODC will receive 30% of Debswana production from the start of the new contract period, progressively increasing to 50% by the final year of the contract. This, De Beers stated, will ensure a sustainable transition path for both partners. Debswana is an equal partnership between the government of the Republic of Botswana and the De Beers Group of companies.
The agreement, in principle, stipulates a new 10-year sales agreement for Debswana's rough diamond production through to 2033 and a 25-year extension of the Debswana mining licences through to 2054. Botswana remains the world's top diamond producer in terms of value.
"The transformational new agreement between the Botswana government and De Beers reflects the aspirations of the people of Botswana, propels both Botswana and De Beers forward, and underpins the future of their Debswana joint venture through long term investment," the De Beers statement reads.
It continued that the agreement represents a new chapter in an enduring diamond partnership by focusing on four key areas of value. These are industry leadership; Debswana's future; economic diversification; and Botswana jobs.
In terms of industry leadership, the new deal aims to significantly expand Botswana's footprint and leadership position across the diamond value chain. This includes the transition to increasing the share of Debswana supply sold via ODC. In terms of Debswana's future, the new deal progresses the long-term capital investment required to secure Debswana's position as one of the world's leading diamond producers, and Botswana's largest private employer, for decades to come.
The new agreement also accelerates Botswana's economic diversification through the creation of a multi-billion Pula Diamonds for Development Fund. This fund, with an upfront investment by De Beers, aims to create substantial additional value to the Botswana economy.
Finally, in terms of Botswana jobs, the new agreement creates the potential for tens of thousands of new jobs in Botswana, both within an expanded Botswana-based diamond industry and emerging sectors, with a focus on supporting the growth of a knowledge-based economy.
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"For De Beers, it is a privilege to renew our half-century partnership with the people of Botswana. It is a partnership that is highly regarded around the world for the enduring role it has played in creating economic development and growth. Our transformative agreement reflects the aspirations of the country, secures the future of our Debswana joint venture, and reaffirms De Beers' leadership position for the long-term. The agreement represents our commitment to deliver investments in Botswana's diamond production, Botswana's diamond value chain, Botswana's knowledge-based economy and, above all, the people of Botswana," said Al Cook, CEO of the De Beers Group.
Meanwhile, De Beers noted that the terms of the previous sales agreement, which expired on 30 June 2023, will remain in place while the partners progress and implement the new sales and mining agreements.
Botswana president Mokgweetsi Masisi, who has been pushing for a bigger share of Debswana's output, had threatened to sever ties with De Beers if the government's concerns weren't reflected in the new deal that has been in negotiation since 2018.
Established in 1888, De Beers Group is the world's leading diamond company with expertise in the exploration, mining and marketing of diamonds. Together with its joint venture partners, De Beers Group employs more than 20 000 people across the diamond pipeline and is the world's largest diamond producer by value, with mining operations in Botswana, Canada, Namibia and South Africa. The De Beers Group is a member of the Anglo American plc group.
