Botswana Finalizes Diamond Sales Agreement with De Beers
Deal Brings Hope Amid Economic Slump
The government of Botswana has signed a long-awaited diamond sales agreement with Anglo American's subsidiary De Beers. This agreement is expected to create significant job opportunities amidst an economic downturn.
Protracted Negotiations Culminate in Historic Pact
Negotiations for this deal commenced in 2018. In 2023, provisional terms were agreed upon under Botswana's previous president, but the official agreement remained elusive.
President Duma Boko, who ascended to power in October 2024, prioritized finalizing this agreement with De Beers. The deal is crucial for Botswana's economy, which heavily relies on diamond exports.
Details of the Diamond Sales Agreement
According to President Boko, the agreement is advantageous to Botswana and will drive the nation's future growth. Key provisions include:
- Botswana's share of rough diamonds from its joint venture with De Beers (Debswana) will increase from 25% to 50% over the next decade.
- Debswana's mining license will be extended for 25 years, until 2054.
Economic Implications and Outlook
Botswana's economy contracted last year due to a prolonged decline in the global diamond market, reduced demand, and a supply glut. Additionally, prices of rough diamonds have decreased due to the growing popularity of lab-grown diamonds and decreasing preference for traditional diamonds among younger consumers.
However, the government anticipates a rebound in the economy this year, supported by an improvement in the global diamond market and strong performance in other sectors.
