Botswana’s central bank reported that Debswana, the country’s major diamond producer equally owned by De Beers and Botswana, experienced a 52% fall in raw diamond sales from January to September this year. This drop reveals an urgent problem that needs to be solved as diamond revenues are vital for economic development, which requires strong attention and support. Botswana’s newly elected President, Duma Boko, clearly sets it as one of his primary goals and responsibilities. He intends to accelerate discussions with De Beers to establish a new sales agreement, which should be mutually beneficial and stable. Without doubts, the final deal will have a significant impact on the nation’s diamond sector and its economy.
Last year, De Beers and Botswana’s former government agreed on restructuring the diamond sales framework. Former President Mokgweetsi Masisi’s administration started this initiative to enhance the country’s proceeds from its diamond reserves; however, this deal has not yet been formalized due to the election of the new president and transition of power. In general, the new leader supports the plan to gradually increase Botswana’s diamond stake from Debswana from 25% to 50%, but it is logical that a new time frame must be set.
Boko reflected on the possible strain in relations with De Beers, pointing out that the company’s trust was undermined by the way the negotiation process was handled. He said that at one point, there was a risk that De Beers would withdraw entirely, which was not what the country needed. The president has acknowledged the challenges surrounding these negotiations and emphasized that his administration would work towards ensuring a secure agreement focusing on teamwork and compromise. Each side has goals, and a balanced dialogue is necessary to ensure they are met. Boko is determined to guarantee a stable and effective partnership with the diamond titan. On the other hand, De Beers confirmed it is committed to cooperating with Botswana’s government and walking towards the shared goals, especially considering their long-standing relationships.
SABC News video report on President Duma Boko’s meeting with De Beers’ executive leadership.
It is important to mention that the broader restructuring strategy held by Anglo American includes divestment opportunities for De Beers. Currently, Botswana holds a 15% stake in De Beers; however, former President Masisi stated that the government seeks to increase this share. President Boko’s administration also sees this as one of its priorities and will focus on discussions that can potentially lead to increasing ownership. The positive tendency is proved by industry analysts, who think that the new administration will make efforts to reach progress on this matter as diamonds take a central role in Botswana’s economy.
