After seven years at the bargaining table, the long-delayed Botswana-British diamond deal reached its ending.
The Botswana government and De Beers, a London-based mining giant, put pen to paper on Tuesday, inking a milestone agreement that redefines the partnership between the diamond-rich African nation and the world’s top diamond producer by value.
Doubled Gems For Southern African Nation’s Coffers
Under the terms of the newly signed agreement, Botswana will see its share of diamonds from Debswana—the 50-50 joint venture with De Beers—grow from 25% to 50%.
The country will also receive 10 billion pula ($712 million) in development funding, matching the details of the provisional arrangement from 2023.
The mining licences for Debswana have been stretched until 2054, a 25-year extension from the earlier end date of 2029. This grants both sides long-term steady footing in a market battling headwinds from lab-grown alternatives and shifting consumer tastes.
New Leadership Puts Old Deal To Bed
The long-delayed diamond deal stalled under former President Mokgweetsi Masisi but found new life with President Duma Boko, who made the agreement a top task after winning office last October.
Boko, a 54-year-old lawyer who led the Umbrella for Democratic Change to a shocking win over the Botswana Democratic Party, ended the party’s nearly 60-year grip on power. The UDC took 36 parliamentary seats compared to just four for the BDP, which had held sway since independence from Britain in 1966.
“We are people of durable relationships,” Boko said at the signing event. “We have us a good deal and we trust that it will carry us into the future.”
Jobs Stand Above Gems In National Wish
For Botswana, which leans on diamonds for the bulk of its national income, the deal brings both wealth and worries. While the mining sector accounts for 80% of exports, its contribution to hiring stays low.
“To the people of Botswana, this agreement is about you, about the jobs it will create,” Boko told the audience at the signing event.
Despite a yearly income per person of $7,820—higher than oil-rich Gabon and regional heavyweight South Africa—the country has struggled to branch out beyond mining. This narrow base has left the country open to wild swings when global diamond prices drop.
Diamond Tale To Shine In Fresh Ad Push
Looking beyond the deal itself, De Beers and Botswana plan a joint marketing drive to boost natural diamond sales amid falling demand.
“In a modern world where people care where their clothes were made and how their food got onto their plate, the best way to help Botswana’s diamonds shine is by telling their stories,” De Beers CEO Al Cook explained. “So that’s exactly what we going to do.”
The campaign aims to set apart natural gems from lab-grown rivals that have cut into market share. For Botswana, which owns 15% of De Beers and counts on diamonds for about a third of its budget, such backing might help turn around its widening money gap.
British Company Holds Fast To Riches Source
The long-overdue diamond deal lands at a fitting time for De Beers. The firm’s parent company, Anglo American, is weighing whether to sell off the diamond business through a sale or stock offering.
Weak global prices have thrown a wrench in this plan, with Anglo writing down De Beers’ value by $2.9 billion after an earlier $1.6 billion cut. These moves hint at the rocky road ahead for the industry.
For De Beers, keeping tight links with Botswana makes business sense. The southern African country supplies 70% of the company’s yearly rough diamonds, making it the heart of their worldwide mining work.
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