2023-07-03 20:14:49
After several months of negotiations and threats brandished by Gaborone to get closer to the Belgian HB Antwerp, Botswana and the Anglo American company, owner of the diamond giant De Beers, have reached a consensus. An “agreement in principle”, according to an announcement made this Monday, July 3 by Anglo American.
Indeed, the government and De Beers have decided to set up a new agreement for the sale over ten years (until 2033) of rough diamonds produced by Debswana, a joint venture that the two parties hold equally (50/50). Under this agreement, Debswana’s mining licenses were extended for 25 years (until 2054).
Under the terms of the new contract, Botswana will now own 30% instead of 25% of diamond production for sale, through the state-owned Okavango Diamond Company. This percentage will be increased to 50% during the last year of the contract, according to officials of the two companies.
Pression
Botswana President Mokgweetsi Eric Keabetswe Masisi had demanded a renegotiation of the contract (win-win agreement), which expires on June 30, 2023 in order to derive more revenue from diamond mining in his country. For several months, the strong man from Gaborone has continued to exert pressure on De Beers officials, demanding a “more fair and equitable” agreement.
Moreover, he even threatened to move up a gear and break this contract if the company’s officials are not in favor of this renegotiation.
The contract in question dates back to 2011 when the South African company is authorized to buy the entire production of rough diamonds from the Debswana company.
Under this agreement, the mining company De Beers received 90% of the rough diamonds produced while Botswana received 10%. Subsequently, the agreement (which ended in 2021) was extended by the parties. This time, Botswana’s share has been increased to 25% from 10% previously.
As Africa’s largest diamond producer and the world’s second largest, Botswana has an economy that is highly dependent on resource revenues with more than a third of its gross domestic product (GDP).
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