Botswana in talks with De Beers to extend diamond sales deal

BOTSWANA – Botswana plans to conclude negotiations with De Beers on a diamond sales agreement by the end of April 2020 to replace the current 10-year deal that expired in January.

The government wants to see more gems cut and polished within the borders of the world’s second-biggest biggest diamond producer, creating jobs and boosting the state coffers, according to Lefoko Moagi, the minister of mineral resources, green technology and energy security.

An agreement is crucial for both parties. Botswana accounts for more than two-thirds of De Beers’ production, while the country relies on the gems for 90% of its exports and wants to derive as much benefit as possible from its mineral wealth.

 “We are looking at April, not beyond, for all of this to happen and be successfully concluded,” Moagi said in an interview in his office in Gaborone, the capital.

“We now want further to move into the value space; the bottom end of the business which involves your valuation, your pricing, cutting and polishing, marketing, selling, jewellery making.”

According to IOL Business Report, De Beers remains fully focused on continuing to be a dedicated partner to the people of Botswana, and to delivering on our commitments, the unit of Anglo-American Plc said in an emailed response to questions.

Botswana already owns 15% of De Beers and has a 50% stake in the Debswana mining company.

 As part of the existing agreement, De Beers moved diamond sales to Botswana from London, and the government secured the right to sell 10% of Debswana’s production independently.

The country’s exports of polished diamonds climbed as a percentage of total gem exports in 2017 and 2018, according to data from the central bank.

Still, the US$846 million of polished gems exported in 2018 is dwarfed by the US$5.1 billion of rough stones.

The landlocked southern African nation is one of Africa’s success stories, largely thanks to its diamonds and the prudent management of the resource.

At independence from Britain in 1966, gross domestic product per capita was US$70, making it one of the world’s poorest nations.

Just 12 kilometres (7.5 miles) of roads were paved, according to the World Bank. By 2018, GDP per capita had climbed to US$8,259, higher even than its more developed neighbour, South Africa. Botswana now has 7,000 km of paved roads.

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