After many months of negotiations, it’s finally happened: De Beers and the government of Botswana have inked a last-minute deal, just before the deadline for a deal expired, according to a report by Bloomberg.
Under a new agreement, Botswana’s state-owned diamond trader is set to receive a larger portion of the output from Debswana, the De Beers’ unit responsible for approximately two-thirds of the group’s annual production. The revised terms stipulate that the state-owned trader will now be entitled to 30% of Debswana’s output – a significant increase from the previous arrangement. Additionally, the government has announced a tentative agreement that holds the potential for this share to further rise to a maximum of 50% in the future. The deal also includes new 25-year mining licenses for Debswana.
Emma Peloetlets, permanent secretary to Botswana’s president, said on state TV: “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%.”
Over the years, Botswana’s share of Debswana’s output has risen from 10% in 2011 to 25% in 2020. Negotiations for a new deal have been ongoing since 2018.
