New diamond sales agreement shrouded in secrecy

The signing of a new ten-year diamond sales agreement between Botswana and De Beers on Tuesday, along with a 25-year extension of mining licenses until July 2054, has raised numerous unanswered questions.While the finalisation of the agreement after six years is a positive development, the details remain shrouded in secrecy, much like in previous deals. The public is once again left uninformed about the contents or the specific terms agreed upon in the agreement.Notably, the ruling Umbrella for Democratic Change (UDC), which previously criticised the then ruling Botswana Democratic Party (BDP) for withholding details of past agreements, now finds itself in a similar position.The lack of transparency extends not only to the public but also to legislators. To make matters worse, a scheduled press conference that could have provided clarity—especially on any new aspects of the contract—was abruptly cancelled.As of Wednesday, there was no indication of when it would be rescheduled. What is clear, however, is that this agreement marks one of the longest-running partnerships in the world.It ensures that Debswana can continue to derive long-term value from its existing mining operations and expansion projects, including Jwaneng Cut-9, Jwaneng Underground, and Orapa Cut-3.Speaking during the signing ceremony, Minerals and Energy Minister, Bogolo Kenewendo said the agreement is not just about securing revenue, but about securing futures.“It is about ensuring that our resources translate into opportunities—opportunities for growth, innovation, and meaningful participation in the diamond value chain.“The government remains steadfast in its commitment to empowering citizen-owned businesses, developing skills, and expanding local beneficiation,” she said.For his part, De Beers Chief Executive Officer Al Cook explained that there are many elements of the agreements that “I am proud of, but one I want to draw special attention to is the creation of the Diamonds for Development Fund.”This Fund has been designed to add a substantial amount of additional value to Botswana’s economy by accelerating the country’s economic diversification. De Beers will begin the Fund with an upfront investment of P1 billion (c. $75 million), then will invest further contributions over the next 10 years that could total up to P10 billion (c. $750 million).“This is both a significant investment and further proof of our belief in Botswana and its people. Brilliant Batswana whose lives have been, and will continue to be shaped by opportunities natural diamonds have created.“They know this, but much of the world doesn’t. Which is why these agreements also see De Beers and the Okavango Diamond Company commit to supporting joint natural diamond marketing campaigns.“Together, we are going to drive consumer desire and demand for natural diamonds by investing in category marketing that will underline the provenance of Botswana’s natural diamonds,” he said. It is said that in the new sales agreement, Botswana’s state-owned Okavango Diamond Company (ODC) will sell 30 percent of Debswana’s production, while De Beers will sell 70 percent for five years.In the following five years, ODC’s share will increase to 40 percent, while De Beers’ share will be 60 percent.Now that the celebrations have ended and business must continue, including the sale of diamonds, many pressing questions remain unanswered.Has De Beers addressed the alleged USD 7 billion tax debt owed to Botswana? What about the reported negotiations for the Botswana government to reduce this amount—if true, did De Beerssucceed in securing a reduction, and at what cost?How does the new diamond agreement between the Government of Botswana and De Beers differ from the one negotiated under the Masisi administration?Looking ahead, what is the outlook for the natural diamond industry? And should Botswana begin preparing for a post-diamond economy?

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New diamond sales agreement shrouded in secrecy