De Beers Botswana Agreement

De Beers Botswana Agreement

The partnership was strengthened with a long-term agreement to make Botswana a reference centre for diamonds. Minister of Minerals, Energy and Water Resources Dr Ponatshego Kedikilwe hailed the agreement as an important step in securing the future of Botswana`s economy and said: “Botswana and De Beers today renewed one of the most successful public-private partnerships in the world. This agreement, together with the concrete results it will bring, will enable Botswana to achieve its goal of being an important diamond centre, committed to all aspects of the diamond sector. The agreement is necessary for the joint venture between the government and De Beers, Debswana Mining Company, which supplies the country with about two-thirds of its foreign exchange and accounts for 20% of its gross domestic product. “We continue to focus on cooperating with the government on the next agreement and trying to finalize it,” De Beers spokesman Kesego Okie said in an emailed response. In addition, the agreement provides for an independent outlet for the Government of Botswana, which will begin this year with 10% of Debswana`s mining production and increase to 15% over a five-year period. Debswana will continue to sell 100% of its annual production to DTCB, which will sort and evaluate production. DTCB will sell most of this production to De Beers and the rest to a new government-appointed outlet, Okavango Diamond Company. With the new agreement, signed the longest by the two shareholders, the Sightholders of De Beers are now buying their rough diamonds from Gaborone and instilling the critical mass of the secondary diamond trade in Botswana. Among the benefits of the agreement is the growth in the volume of diamonds traded in Botswana to the tune of about $6 billion, much of which is expected to go through local banks. This will result in increased employment, as well as downstream and other support services.

This agreement is the cornerstone of the long-term future of one of the world`s most successful public/private partnerships. De Beers recently transferred its international sorting centre from London to Gaborone, which led to the sale of rough diamonds from outside Botswana in the interior of the country. However, there is no register for exceptional diamonds, which limits the ability of the parties involved, the volume and value of the raw stones sold or the sales and royalties to be paid at a later date.