Botswana’s newly elected president, Duma Boko, has announced his intention to expedite negotiations for a new diamond sales agreement with De Beers – a deal that will have significant implications for Botswana’s diamond industry.
According to data from Botswana’s central bank, Debswana’s rough diamond sales dropped by around 52% in the first nine months of 2024. This decline highlights the need for a steady, beneficial agreement for Botswana’s economy, where diamonds remain a central revenue source.
A Decade-long Diamond Pact Under Negotiation
In 2023, De Beers and Botswana’s government agreed in principle to a diamond sales framework that aims to gradually increase Botswana’s share of diamonds from Debswana, a 50-50 joint venture between De Beers and the Botswana government, from 25% to 50% over a ten-year period. This change was designed to give Botswana increased revenue from its diamond resources, a goal promoted by the previous administration under President Mokgweetsi Masisi. However, the agreement has yet to be formally signed, in part due to recent political changes.
Boko acknowledged the complexities in the negotiations and expressed his intent to secure a stable agreement. Commenting on the discussions with De Beers, he noted, “The relationship with De Beers could have been damaged by the way the negotiations were handled,” adding that De Beers had at one point been “considering walking away, not signing at all … (a) very dangerous position to be in as a country.”
Focus on Collaboration and Compromise
Boko has pledged to take a collaborative approach in renewing discussions with De Beers, recognising the need for mutual understanding and compromise. He stated, “A proper negotiation involves compromise, where you get a bit of what you wanted, the other person gets a bit.” Boko aims to ensure that Botswana’s partnership with De Beers remains steady.
A spokesperson for De Beers confirmed the company’s willingness to work alongside Botswana’s government, stating, “We will continue to work with Botswana’s Government in support of shared objectives, as we always have.”
Anglo American’s Strategic Review and Potential Impact
Anglo American has been assessing options for a possible divestment of De Beers as part of a broader restructuring initiative. The Botswana government currently holds a 15% stake in De Beers, and discussions on potentially increasing this share have been ongoing. Earlier this year, former President Masisi suggested that Botswana may seek to expand its shareholding, an option that could remain on the table under Boko’s administration.
Industry analysts are optimistic about the potential for progress following Botswana’s election results. Diamond industry analyst Paul Zimnisky commented, “Diamonds by far represent the most important industry for Botswana, so this has to be one of the front and centre issues for the (new) president. I would expect to see progress on this front now.”
