De Beers and the Botswana Government have recently reached a significant agreement that extends their partnership through a new Sales Agreement and mining licenses, until 2054.
This long-term commitment ensures stability, investment, and continued success for their joint venture, Debswana, which holds a vital position in the diamond market.
Securing a Strong Partnership
The new agreement between De Beers and Botswana focuses on four key areas of value, demonstrating their dedication to industry leadership, the future of Debswana, economic diversification, and job creation. By addressing these areas, the partnership aims to strengthen Botswana's presence and leadership across the entire diamond value chain.
Expanding Diamond Supply
As part of the agreement, the share of Debswana's supply sold through the Okavango Diamond Company (ODC) will gradually increase from 30% to 50% by the end of the contract period. This expansion signifies the partners' commitment to maximizing Botswana's role in the diamond industry.
Investment for Long-Term Growth
To solidify Debswana's position as a top global diamond producer and Botswana's largest private employer, the agreement emphasizes significant long-term capital investment. This commitment ensures that Debswana remains a key player in the diamond market for decades to come.
Economic Diversification and Development
In line with Botswana's economic diversification goals, a Diamonds for Development Fund will be established. De Beers plans to make an upfront investment of BWP 1 billion (approximately $75 million), with additional funds of up to BWP 10 billion (around $750 million) over the next decade.
This fund aims to generate substantial economic value for Botswana.
Job Creation and Knowledge-Based Economy
The partnership holds the promise of creating tens of thousands of new jobs within the expanded diamond industry and emerging sectors in Botswana. With a focus on supporting the growth of a knowledge-based economy, this collaboration aligns with Botswana's goal of fostering sustainable economic development.
Al Cook, CEO of De Beers Group, expressed his excitement about renewing the partnership, stating that the agreement reflects their commitment to Botswana's economic growth and the welfare of its people.
The agreement not only secures the future of the Debswana joint venture but also reaffirms De Beers' position as a leader in the industry.
Continuity During Transition
While the formal Sales and Mining Agreements are being progressed and implemented, the terms of the most recent Sales Agreement, which expired on June 30th, will remain in place, ensuring a smooth transition for all parties involved.
Conclusion
The extended partnership between De Beers and Botswana through a new Sales Agreement and mining licenses represents a significant milestone in their enduring diamond collaboration.
With a focus on industry leadership, economic diversification, job creation, and long-term investment, this partnership sets the stage for continued success and growth in the diamond industry and the broader Botswana economy.
