Botswana’s government has officially signed a long-delayed 10-year diamond sales agreement with Anglo American’s De Beers, with an option to extend the pact for an additional five years.
Under the finalized deal, Botswana’s state-owned Okavango Diamond Company (ODC) will receive 40% of the production from Debswana, the 50-50 joint venture between the government and De Beers. This marks a revision from the provisional agreement, which had initially set the share at 50%. However, ODC’s allocation could still increase to 50% during the potential five-year extension period, according to a joint statement from both parties.
For the first five years, ODC will sell 30% of Debswana’s output, an increase from the previous 25%.
Negotiations for the agreement began in 2018, and while a provisional deal was announced in 2023, it was never formally signed. Botswana’s newly elected President Duma Boko, who took office last October, prioritized finalizing the deal, recognizing its significance for the country’s diamond-reliant economy.
Economic Impact and Future Prospects
Speaking at the signing ceremony in Gaborone, President Boko emphasized the importance of the agreement for Botswana’s people and job creation.
“We have secured a good deal, and we trust it will shape our future. To the people of Botswana, this agreement is about you and the opportunities it will create,” he stated.
As part of the agreement, Debswana’s mining licenses, which were set to expire in 2029, will now be extended until 2054.
Botswana’s economy faced a contraction last year due to a downturn in the global diamond market, driven by declining demand, an oversupply of rough diamonds, and competition from lab-grown alternatives. However, the government remains optimistic that economic conditions will improve in 2024, buoyed by a recovery in the diamond market and stronger performance in other sectors.