De Beers hails spirit of renewal after Boko meeting

While government and De Beers signed an agreement in principle last June and heads of terms in October, the two sides are yet to finalise the agreement that will govern the sale of diamonds from Debswana mines into the future.

Under the agreement in principle, Botswana’s state-owned diamond trader, the Okavango Diamond Company, will be entitled to purchase and independently market 30% of output from Debswana, up from the current 25%. The allocation will rise to 50% over the next ten years.

The two sides had also agreed to establish a multi-billion pula Diamonds for Development Fund, with an upfront investment by De Beers of P1 billion. Further contributions over the next 10 years of the deal would be made totalling P10 billion.

The delay in finalising the agreement means the two sides are continuing with the terms they had prior to the June 30 agreement in principle.

A week before the elections, former president, Mokgweetsi Masisi, said “a little bit more” was left to finalise the deal, adding that the main terms had been agreed to. Masisi took a hardline stance against De Beers during the negotiations, which Boko said had run the risk of alienating the long-term partner and hastening its exit from the country.

This morning, Cook said a final deal was “days and weeks, not months and years” away.

“We are getting to the point of the technicalities in the agreements, dotting the Is and crossing Ts,” he said after the meeting with Boko. “We are at a time when diamond markets are in a challenging place, probably the most challenging since the 1980s. “What we have agreed is that the world’s leading diamond country, the Republic of Botswana, and the world’s leading diamond company, De Beers, will stand shoulder to shoulder in marketing and creating desire for natural diamonds. “That spirit of renewal is a very positive one.”

Cook declined to comment when asked whether De Beers expected the talks with the new administration to materially change the terms agreed with the Masisi administration.

“The two sides are working to finalise the agreement. We have both sides working in good faith on that conclusion. I’m very confident that we are going to get to the right place,” he said.

Since 2019, De Beers and government have been negotiating the terms of a new agreement governing the sale of diamonds from Debswana, as well as the renewal of the company’s mining leases which expire in 2029.

Besides the tensions stoked by high stakes negotiations, more pressure came on the talks after Anglo American announced earlier this year that it intended to sell De Beers, as part of structure reorganisation of the mining group.

Anglo has said its exit from its 85% shareholding in De Beers will either be through a sale to another entity, or through a listing of the shares on a stock exchange. Government, which owns the other 15% in De Beers, has indicated its desire to increase its shareholding.