Botswana’s Leader Says Diamond Deal Reached With De Beers
Botswana’s president Duma Boko, who swept to power in October elections, said his government has reached a diamond extraction and sales agreement with De Beers that will bring certainty to the gem-dependent economy.
Terms were finalized by midnight on Jan. 24 and will be announced soon, Boko said in an interview on Tuesday. The southern African nation is the world’s biggest producer of rough diamonds by value and the industry generates the bulk of its income. Most of Botswana’s gems are mined by Debswana, a venture between Anglo American Plc’s De Beers unit and the government.“The issue with De Beers has been settled,” Boko said in Dar es Salaam, Tanzania, where he is attending an energy conference. He indicated last week at the World Economic Forum in Davos, Switzerland, that an agreement was imminent, and said he had followed through on his commitment to conclude it.
During his election campaign, Boko was critical of his predecessor Mokgweetsi Masisi’s handling of talks with De Beers to renew the more than half century alliance between Botswana and the world’s largest diamond firm. Masisi had caused De Beers to consider walking away from the deal, Boko said, and he sought to reopen talks.
Boko’s Umbrella for Democratic Change coalition unseated Masisi’s Botswana Democratic Party, which had led the country since independence from the UK in 1966.
The new agreement had not resulted in “any major changes, just a little tweaking of things here and there,” he said.
Under the provisional terms of a 10-year accord announced by Botswana’s previous administration in July, the state-owned diamond trader was to get 30% of Debswana’s output, while the government would secure 10 billion pula ($720 million) in development funding.
De Beers didn’t immediately respond to a request for comment.
An arid, underdeveloped nation at independence, Botswana has leveraged the discovery of diamonds in 1967 to build itself into the richest country per capita on Africa’s mainland, according to the World Bank.
Lab threat
Still, a prolonged slump in the global diamond market and a challenge from lab-grown gems has hurt its economy. Boko said the agreement will restore certainty and economic growth will follow.
The country will focus on promoting its gems as natural and charging a premium for their provenance, marking them to show they have been mined in the country and their sale promotes development, he said. Diamond revenues in some other parts of Africa have been used to finance conflict.
“We appreciate the threat posed by lab-grown diamonds. I don’t want to give them the privilege of calling them diamonds. Diamonds are natural,” he said. “We will then market our diamonds in terms of their provenance and of the story behind the diamond.”
