By Emmanuel Nduka
The Government of Botswana has finalized an improved diamond sales agreement with world’s leading diamond company – De Beers, marking a pivotal moment for its economy after seven years of negotiations.
Struck on Tuesday, this new deal enhances the government’s stake in diamond sales through Debswana, the joint venture with De Beers, which is a subsidiary of Anglo American.
The new agreement is also expected to bolster Botswana’s economic landscape, as the nation is recognized as the largest producer of diamonds by value and ranks second in volume, following Russia.
Heritage Times HT reports that Diamonds play a crucial role in Botswana’s economy, contributing approximately 80 percent of the country’s exports and accounts for a quarter of its GDP.
Conversely, the recent downturn in diamond prices and demand has severely impacted the economy, becoming a focal point during last year’s national elections.
The ruling party, which had been in power for 58 years since gaining independence from British rule, was ousted in a surprising election outcome largely driven by public discontent over economic challenges linked to the diamond sector.
Under the newly established 10-year sales agreement, the Botswana government will receive a 30 percent share of Debswana’s sales for the first five years, increasing to 40 percent in the subsequent five years, with a potential five-year extension that could lead to a 50-50 split.
The De Beers Group is a South African–British corporation that specializes in the diamond industry, including mining, exploitation, retail, inscription, grading, trading and industrial diamond manufacturing.
