Botswana Strikes Landmark Diamond Deal with De Beers

Botswana’s newly elected President, Duma Boko, has secured a pivotal diamond extraction and sales agreement with De Beers, bringing stability to the nation’s gem-reliant economy. The agreement, finalized by midnight on January 24, will be formally announced in the coming days, Boko confirmed in a recent interview.

As the world’s leading producer of rough diamonds by value, Botswana heavily depends on the diamond industry for its revenue. Most of its diamonds are mined by Debswana, a joint venture between Anglo American’s De Beers unit and the government.

“The issue with De Beers has been settled,” Boko stated from Dar es Salaam, Tanzania, where he was attending an energy conference. His comments follow his earlier indication at the World Economic Forum in Davos, Switzerland, that an agreement was imminent.

Boko’s administration sought to renegotiate the deal following criticism of his predecessor, Mokgweetsi Masisi’s handling of discussions with De Beers. According to Boko, Masisi’s approach had nearly jeopardized Botswana’s long-standing partnership with the diamond giant. In response, Boko reopened talks to ensure a more favourable and sustainable outcome.

His Umbrella for Democratic Change coalition unseated Masisi’s Botswana Democratic Party in the October elections, ending the latter’s decades-long political dominance since Botswana’s independence from the UK in 1966.

While Boko noted that the new agreement involved only minor adjustments, he emphasized that it would maintain the long-standing benefits for Botswana. Under the provisional 10-year accord announced by the previous administration in July, the state-owned diamond trader was set to receive 30% of Debswana’s output, while the government would secure 10 billion pula ($720 million) in development funding.

Botswana has transformed from an arid, underdeveloped nation at independence into the wealthiest country per capita on Africa’s mainland, thanks to its diamond wealth, according to the World Bank. However, the global diamond market’s prolonged downturn, coupled with the rise of lab-grown diamonds, has created economic uncertainties.

Main Image: Skillings Mining Review