Botswana’s newly elected President, Duma Boko, announced on Friday his intent to finalize negotiations for a new diamond sales agreement with De Beers as soon as possible.
De Beers, a subsidiary of Anglo American, had previously agreed to a deal that would gradually increase Botswana’s share of diamonds from the Debswana joint venture to 50% over the next decade.
Currently, Debswana, co-owned by Botswana and De Beers, supplies 75% of its diamond output to the global diamond giant.
Although the previous administration, led by outgoing President Mokgweetsi Masisi, highlighted the benefits of the proposed agreement, the deal remains unsigned.
In a televised address, President Boko expressed concern over the risk of De Beers potentially withdrawing from the deal, describing it as “a very dangerous position” for the country. He emphasized the importance of repairing relations with De Beers, which he felt had been strained by the handling of the negotiations.
“The first step is to engage De Beers constructively,” Boko stated, underlining his administration’s intent to understand De Beers’ position fully.
He described a successful negotiation as one where “each party gets a bit of what they wanted, leading to a durable, sustainable agreement.”
A De Beers spokesperson responded, stating, “We will continue to work with Botswana’s government in support of shared objectives, as we always have.”
Anglo American, currently restructuring its operations, is considering divesting its stake in De Beers, and Botswana’s government may increase its own shareholding from the current 15%.
Industry analyst Paul Zimnisky noted that the recent election could ease the path for such a restructuring and emphasized that securing a strong diamond sales agreement is a critical issue for Botswana’s new administration.
The diamond industry, like other luxury sectors, has been hit hard by declining global demand. Botswana’s central bank recently reported that sales of rough diamonds at Debswana fell by approximately 52% in the first nine months of 2024, reflecting broader market challenges.
