25th February 2025
Sello Motseta
After 6 years of protracted negotiations, the Government of Botswana and De Beers Group formally announced that, the two partners have signed the formal new agreements for a 10-year Sales Agreement.
The parties have also agreed a 25-year extension of the Mining Licences (from 2029 through to 2054) for the 50:50 Debswana mining joint venture.
Bogolo Joy Kenewendo, Minister of Minerals and Energy for Botswana, said: “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.”
She said, “We hope that these agreements will bring some level of stability and rebuild market confidence in the diamond industry. We are looking forward to our renewed partnership with De Beers; together we will drive development through diamonds and build a brighter future for Batswana.”
A 25-year extension of Debswana mining licences from August 2029 to July 2054 has also been agreed. This will enable the Debswana joint venture to deliver long-term value from its existing mining assets and mine life extension projects beyond the current mining licence period. Mine life extension projects include Jwaneng Cut-9, Jwaneng Underground and Orapa Cut-3.
A renewed 10-year Sales Agreement for Debswana’s rough diamond production, with a further five-year extension period where certain criteria are met. Under the renewed Sales Agreement, the Government of Botswana’s rough diamond sales company, Okavango Diamond Company, will sell 30% and De Beers will sell 70% of Debswana’s production for the first five years.
President Advocate Gideon Boko speaking on the occasion of the signing ceremony said Botswana is the best place in Africa to invest. Her called for more introspection and said it was important that Batswana do not respect their institutions too much, in an effort to refashion and improve them.
Boko maintained that the partnership has reached a point in its journey where it faced new challenges as well as unstable and unresponsive markets coupled with lab grown diamonds.
“We are people of durable relationships,” said Boko. He said, “We have a challenge to tell the story of natural diamonds.”
In the subsequent five years ODC will sell 40% and De Beers will sell 60% of Debswana’s production; and both parties will sell a 50% share for the five-year extension period.
As part of this arrangement, De Beers and ODC have also both committed to supply diamonds for beneficiation in Botswana in line with their share of Debswana supply.
In addition, a transformational package of commitments focused on supporting Botswana’s economic development objectives and advancement of the diamond industry has been agreed, including the creation of the Diamonds for Development Fund.
It is expected to support economic growth, diversification and jobs in Botswana in line with Botswana’s Vision 2036 and National Development Plan. De Beers has already committed to an upfront investment of BWP 1 billion (c. $75 million) and further annual contributions from its dividends from Debswana, based on Debswana’s performance.
A package of initiatives is set to be undertaken by De Beers designed to enhance local beneficiation of diamonds and increase local participation, in the diamond industry.
These include investment in a diamond jewellery manufacturing facility, establishment of a De Beers Institute of Diamonds grading laboratory and starting up a diamond vocational training institute in collaboration with industry partners.
There will also be co-investment by the Government of Botswana and De Beers in marketing initiatives to boost diamond demand. The marketing investments will be agreed annually, to stimulate rough diamond sale and protect the ethical integrity of diamonds.
The process is also designed to maintain and build consumer confidence in the product. De Beers and the Government of Botswana have revealed a commitment to co-invest over the life of the Sales Agreement and in proportion to their relative shares of Debswana supply.
Al Cook, Chief Executive Officer of De Beers Group, said: “These are ground breaking agreements. The half-century partnership between the Government of Botswana and De Beers is considered the greatest public-private partnership in the world.”
He said, “Now we are both extending and improving it. For De Beers, it is a privilege to secure our ongoing participation in the world’s greatest diamond resources for decades to come. I am also extremely proud that through the Diamonds for Development Fund, we can further transform opportunities for the people of the world’s leading diamond country.”
