Botswana and De Beers have finalised a long-awaited 10-year diamond sales agreement, with a potential five-year extension. The deal revises the share of Botswana’s state-owned Okavango Diamond Company (ODC) in Debswana’s production, a 50-50 joint venture with De Beers. ODC’s share will reach 40% at the end of the 10-year period, down from the originally proposed 50%. However, during the potential five-year extension, ODC’s allocation could increase to 50%. In the first five years of the agreement, ODC will sell 30% of Debswana’s output, an increase from the previous 25%.
Negotiations for this deal began in 2018, and while a provisional agreement was announced in 2023, it was never officially signed. Botswana’s newly elected President Duma Boko prioritized finalizing this agreement, recognizing its critical importance to the country’s diamond-dependent economy. President Boko emphasized that the deal is for the people of Botswana and will create jobs.
The agreement also extends Debswana’s mining licenses to 2054, which were set to expire in 2029.Botswana’s economy experienced a contraction last year due to a prolonged downturn in the global diamond market.Factors such as declining demand, a supply glut, the rise of lab-grown diamonds, and changing consumer preferences have impacted rough diamond prices. However, the government anticipates an economic rebound this year, driven by improvements in the global diamond market and stronger performance in other sectors.