After years of negotiations, Botswana has signed a new agreement with South African company De Beers, marking a significant milestone in their diamond trade partnership. The government and De Beers issued a joint statement affirming that the new deal aligns with the aspirations of the people of Botswana.
President Mokgweetsi Masisi had previously threatened to sever ties with De Beers unless a mutually beneficial agreement was reached. The previous agreements heavily favored De Beers, which had obtained up to 90% of Botswana’s diamonds in 2011. President Masisi championed for a fairer distribution of the country’s resources, resulting in the new agreement that will see Botswana receiving a greater share of the diamonds.
According to reports from Bloomberg, the new agreement stipulates that Botswana will receive 30% of the diamonds, with the government aiming to negotiate for an even higher share, possibly reaching 50%. Although the government and De Beers jointly own the Debswana mining business, the distribution of rough diamonds has been imbalanced, with De Beers reaping the majority of the benefits. President Masisi emphasized the need for a more equitable arrangement, stating that Botswana had been receiving far less than it rightfully deserved.
The deal was reached just before the expiration of the previous agreement, underscoring the tensions that surrounded the negotiations. The financial stakes are enormous, as rough diamond mining accounts for one-third of Botswana’s GDP, while De Beers derives 70% of its revenue from operations in Botswana. The continuation of this commercial partnership, which commenced in 1966, is now secured with the extension of the rough diamond sales agreement for ten years.