After extensive negotiations, De Beers and the government of Botswana have signed a historic agreement extending their diamond partnership for another decade.
The new sales agreement for rough diamonds from Debswana, the joint venture between the government and De Beers, will remain in effect for the next 10 years, De Beers announced on Tuesday.
Under the terms of the deal, 30% of Debswana’s production will go to the state-owned Okavango Diamond Company (ODC) for the first five years.
This will increase to 40% in the second half of the agreement. Additionally, the two parties have agreed to a potential five-year extension, during which the share of rough diamonds will be equally split between De Beers and ODC.
The agreement also includes an extension of Debswana’s mining licenses for 25 years, from August 2029 to July 2054. Debswana operates the Jwaneng, Letlhakane, Damtshaa, and Orapa mines.
“We are proud to announce the signing of this landmark new agreement, which will underpin the success of our diamond industry as we enter an exciting new phase of Botswana’s sustainable economic development,” said Botswana’s Minister of Minerals and Energy, Bogolo Joy Kenewendo. “We hope these agreements will bring stability and rebuild market confidence in the diamond industry.”
The new terms follow an “agreement in principle” signed in July and emphasize supporting Botswana’s economic growth and advancing its diamond industry.
As part of the deal, De Beers has committed to creating a diamond development fund, investing BWP 1 billion (approximately $75 million) upfront, with further contributions from Debswana’s dividends based on the joint venture’s performance.
Additionally, De Beers will invest in initiatives to boost Botswana’s participation in the diamond industry, including the construction of a diamond-jewelry manufacturing facility, the establishment of a grading laboratory, and the creation of a vocational training institute focused on diamonds.
The two parties will also co-invest in marketing campaigns to enhance demand throughout the life of the agreement.
“We are delighted that this extraordinary diamond partnership is secured for decades to come, affirming De Beers’ leadership position and providing reassurance across the entire diamond value chain,” said Duncan Wanblad, CEO of Anglo American, De Beers’ parent company.
“These agreements provide long-term stability for both partners as they work together to support the rough-diamond market’s recovery from a period of challenging trading conditions.”
This renewed certainty is also seen as a critical step as Anglo American moves forward with its plan to divest from De Beers, marking a new chapter for the world’s most iconic diamond business.
