P10 billion Diamond Fund to create 100, 000 jobs

De Beers will make an initial contribution of P1 billion and an annual base contribution of five percent of their share of the distribution until a total contribution of P10 billion over the next 10 years has been made into the Diamond for Development Fund.

According to the Minister of Minerals and Energy, Lefoko Moagi with additional third party funding, the potential number of jobs created could be 100, 000. Moagi indicated that not only will the fund immediately inject financing into Botswana enterprises, it will also provide investments and security for a long-term economic life 'beyond diamonds'.

He revealed that De Beers will also approach "Friends of Botswana" to contribute to this Fund. The Fund will be used to prepare mining communities in Jwaneng and Letlhakane for "life beyond mining" by developing sectors with comparative advantage in mining areas.

“Furthermore, the Fund will also complement the Government's economic diversification drive at national level to transition to knowledge-based and export-led economy by growing selected high-potential sectors. The targeted sectors are smart agriculture, tourism, water and energy sectors”, Moagi said when briefing Parliament on the agreement between government of Botswana and De Beers.

He revealed that the Government and De Beers Group have reached an agreement in principle on a new 10-year Sales Agreement for Debswana's rough diamond production through to 2033, and a new 25-year Debswana mining licence through to 2054.

Moagi indicated that the two parties have signed an Interim Agreement extending the Sales Agreement by three months up to 30 September 2023, while they finalise the implementation of the formal Sales and Mining Agreements. He stated that an Interim Agreement will preserve the terms of the most recent Sales Agreement which expired on 30 June 2023.

Regarding international Exploration Collaboration, the minister stated that De Beers shall give Government of Republic of Botswana (GRB) the option to partner in diamond exploration activities in eight designated areas of mutual interest in Botswana, Brazil and Canada through a non-exclusive cooperation agreement. He told Parliament that De Beers will also give Botswana first right of refusal in other areas where they will be exploring.

“Exploration offers training of Batswana and exposure to different jurisdictions. Establishment of a diamond lab using DB world leading capabilities offered. The lab could be commercialised to serve the mining and exploration industry.

“On Botswana Expansion Economies and Expansionary Capital Expenditure, De Beers has agreed to increase their contribution of capital expenditure to all expansion projects such as cut 3, cut 9 and Jwaneng underground project”, Moagi said.

He pointed out that on the Debswana Mining Licence and length of New Sales Agreement, GRB shall grant Debswana a new mining licence for a period of 25 years from 1 August 2029 and a 10 years Sales Agreement with a five-year extension, subject to satisfying certain objectives of the beneficiation criteria.

Moagi stated that the Okavango Diamond Company (ODC) purchase entitlement increases to 30 percent immediately after the signing of new agreements, and will then gradually increase to 50 percent in the next 10 years. The objective, he said, is to ensure that ODC is able to build capacity, marketing capability and knowledge of the market so that the Government does not lose value.