President Duma Boko has hailed the new agreements between the Botswana government and De Beers Group as a “good deal,” expressing confidence that it will benefit the nation well into the future.
The two partners recently signed formal agreements, including a 10-year Sales Agreement—extendable by an additional five years—and a 25-year extension of Debswana’s mining licenses, securing operations from 2029 to 2054. Debswana, a 50:50 joint venture between De Beers and the Botswana government, operates the Jwaneng and Orapa diamond mines.
After six years of negotiations, President Boko emphasised that the government has secured a favorable agreement. Speaking at the signing ceremony in Gaborone, he said, “We have a good deal, and we trust that it will carry us well into the future.” He added that the agreement is about creating jobs, fostering hope, and building confidence in Botswana’s institutions.
Boko also challenged citizens to reimagine and improve these institutions to better serve the nation.
“We must not engage in institutional fetishism or respect these institutions too much. Even as we rely on what they provide, we must refashion and enhance them,” he said. He described the partnership as an example of how alliances can be forged based on shared values, virtues, and visions.
The new deal includes a 25-year extension of Debswana’s mining licenses, enabling long-term value creation from existing assets and mine life extension projects such as Jwaneng Cut-9, Jwaneng Underground, and Orapa Cut-3. Under the renewed Sales Agreement, the Okavango Diamond Company (ODC) will sell 30 percent of Debswana’s production, while De Beers will sell 70 percent for the first five years.
This share will shift to 40 percent for ODC and 60 percent for De Beers in the subsequent five years, with both parties selling 50 percent each during the optional five-year extension. Both De Beers and ODC have committed to supplying diamonds for local beneficiation in Botswana, aligning with their respective shares of Debswana’s production.
The agreement also introduces a transformative package aimed at supporting Botswana’s economic development and advancing the diamond industry. This includes the establishment of the Diamonds for Development Fund, backed by an upfront investment of P1 billion (approximately $75 million) from De Beers, with additional annual contributions based on Debswana’s performance. Other initiatives focus on enhancing local beneficiation and increasing citizen participation in the diamond industry, such as investments in a diamond jewellery manufacturing facility, a De Beers Institute of Diamonds grading laboratory, and a diamond vocational training institute. Collaborative marketing initiatives between the Botswana government and De Beers Group are also part of the agreement.
De Beers Group CEO Al Cook described the agreement as a historic evolution in the partnership between Botswana and De Beers.
“The agreement has taken six years to negotiate, but I believe it is worth the wait,” he said. Cook highlighted the Diamonds for Development program as a cornerstone of the deal, emphasising its focus on investing in Botswana’s people and sustainable economic development beyond diamonds.
“It is truly a visionary program and will go down in history as a key achievement of our partnership,” he said.
Minister of Minerals and Energy Bogolo Kenewendo underscored the significance of the agreement, noting its role in securing economic returns and positioning Botswana as the center of the global diamond industry.
“We can drive innovation, beneficiation, and broad-based citizen economic empowerment from here,” she said. Vice President Ndaba Gaolathe echoed these sentiments, describing the deal as a testament to Botswana’s ability to shape its destiny.
“This agreement marks the beginning of yet another prosperous chapter for Botswana,” he said during a gala dinner celebrating the agreement’s conclusion.
The signing of the agreement comes amid challenging conditions in the global diamond market. Recently, De Beers’ parent company, Anglo American, reduced De Beers’ value by $2.9 billion, following a $2.9 billion, following a $1.56 billion write-down the previous year. This has lowered De Beers’ recoverable value to $4.1 billion. Anglo-American CEO Duncan Wanblad attributed the impairment to lower diamond prices, reduced consumer demand, and macroeconomic uncertainty, particularly in China, where demand for luxury goods has declined. He also cited the strengthening of the US dollar against consumer currencies as a contributing factor.
Despite these challenges, Wanblad expressed confidence in the new agreements, stating that they provide long-term stability for both partners. “The certainty provided by these agreements forms a critical step toward De Beers’ next chapter as an independent company and the world’s most iconic diamond business,” he said. The agreements align with the Heads of Terms agreed upon by De Beers and the Botswana government in September 2023, marking a new era of collaboration and shared prosperity.
