De Beers extends Botswana presence

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The Botswana government and De Beers (Debswana) have signed an ‘agreement in principle’ for a new 10-year contract to mine local diamonds until 2033. However, the new licences are valid for 25 years, therefore extending De Beers’ presence in the country until 2054.

No details were given about the specific terms of the new contract. Gaborone has had a long-standing desire for Botswana to have a larger share of Debswana’s production. The press release announcing the news only talks of a “transformative agreement” that lines up with the Botswana people’s expectations.

Under the previous partnership, Debswana sold 75% of its production to the De Beers group and 25% to the Botswana diamond trading company, Okavango Diamond. The parties signed an interim agreement to maintain the terms of this contract until the formal completion of the new partnership.

According to the latest authoritative data, Botswana is the world’s top producer of diamonds in value and the second largest in volume, just behind Russia.

The stones account for two-thirds of the country;s foreign exchange and 20% of its GDP. The new partnership is also highly beneficial for De Beers, which produces 70% of its rough diamonds in Botswana.

In turn de Beers will invest a further R850 million in the country to improve and maintain infrastructure and its operations in the landlocked state.

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