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Botswana is pushing for a higher allocation of rough diamonds mined in the country by De Beers as negotiations over one of the world’s most valuable diamond accords drag on into a fifth year, President Mokgweetsi Masisi said.
The state-owned diamond trader, Okavango Diamond Company, is currently entitled to 25% of output from Debswana, the De Beers unit which generally accounts for about two-thirds of the group’s annual production.
Speaking in a briefing Thursday, Masisi said the government had realised that sales of rough diamonds were “very small” relative to the size of business in the “downstream,” a sector of the industry that includes polished diamonds and jewellery.
“We are at the negotiating table now and because we have learned some new things, we want more for the Botswana government,” he said. “We have learned in outcome terms, and we can make much, much more money than we have been making by selling rough.”
De Beers, a unit of Anglo American Plc, has been negotiating with the government since 2018 for a new deal governing the sales of rough diamonds from the world’s second-largest producer. The current agreement expired in September 2020 but was extended several times, initially because of the pandemic. Last year, the sides agreed to keep the deal going until June.
By pushing for a higher allocation of rough diamonds, Masisi will be able to test out selling and value-adding options outside the De Beers ecosystem.
De Beers officials have been reluctant to clarify whether the group has factored in the possibility of lower diamond volumes from Botswana as a risk to the business. Co-chair Bruce Cleaver said last week in Gaborone that the focus was on getting a deal in place.
“I’m very confident that we will come to a deal that is sensible for all parties and that all parties will be pleased with that,” Cleaver said. “That’s what I’m focused on.”
Diamonds are Botswana’s main economic commodity, accounting for the bulk of foreign currency receipts and nearly a third of budget revenues.
© 2023 Bloomberg
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