(Ecofin Agency) - Botswana supplies 70% of the rough diamonds produced by De Beers. For months, the Botswanese government and the South African group have negotiated to renew their partnership, which was set to expire on June 30, 2023. Gaborone was asking for a bigger share of the profits.

Botswana’s government and De Beers signed an "agreement in principle" for a new 10-year contract to mine local diamonds until 2033. New mining licenses valid for 25 years are included in the agreement, extending De Beers' presence in the country until 2054.

No details were given about the specific terms of the new contract, including whether it fulfills Gabarone’s long-standing desire for Botswana to get a larger share of Debswana’s production. The latter produces diamonds on behalf of both parties. The press release announcing the news only talks of a “transformative agreement” that lines up with the Botswanese people’s expectations.

Under the previous partnership, Debswana sold 75% of its production to the De Beers group and 25% to the Botswana diamond trading company, Okavango Diamond. The parties signed an interim agreement to maintain the terms of this contract until the formal completion of the new partnership. 

According to Kimberley Process data for 2022, Botswana is the world's top producer of diamonds in value and the second largest in volume, just behind Russia. The stones account for two-thirds of the country's foreign exchange and 20% of its GDP. The new partnership is also highly beneficial for De Beers, which produces 70% of its rough diamonds in Botswana.

Emiliano Tossou