De Beers has completed negotiations with the Botswana government for a new rough-sales agreement as well as the extension of current mining licenses.
Reaching the deal has been a protracted process, with the parties extending the previous contract several times since it expired in 2021. Although they signed an agreement in principle in June 2023 and a “heads of terms” document in September of that year, the deal remained unfinalized due to ongoing talks with Botswana’s previous president, Mokgweetsi Masisi. The country elected Duma Boko as its leader in November.
The new sales agreement for rough from Debswana, a 50-50 joint venture between De Beers and the government of Botswana, should reflect the “agreement in principle” signed in July, which allotted 30% of Debswana production to Okavango Diamond Company (ODC), Botswana’s state-owned trading business. That percentage is due to increase progressively to 50% over the course of the 10-year agreement. The deal also extends Debswana’s mining licenses beyond 2029, when they were originally scheduled to expire, De Beers noted. The heads of terms called for a 25-year extension of the mining licenses.
The document also stated the parties would partner on the sale of exceptional diamonds, with both receiving a portion of the polished profits, and accounted for the creation of a diamond development fund. That project would see De Beers invest BWP 1 billion (around $75 million) up front, followed by further contributions over the next 10 years of up to BWP 10 billion ($750 million). These funds will help develop and diversify Botswana’s economy, create more jobs, offer training and skills development, and increase local diamond beneficiation. Debswana encompasses several mining projects, including Jwaneng, Orapa, Letlhakane and Damtshaa.
“Following the issuance of new mining licenses by the appropriate regulatory authorities in Botswana and final governance approvals, both parties look forward to signing and executing the relevant agreements,” the two said. “Until the execution of these new agreements, the terms of the existing agreements will continue to remain in effect.”
Image: Employee sorting through rough diamonds. (Ben Perry/Armoury Films/De Beers)