A diamond sales agreement between Botswana and British mining company, De Beers is expected to be finalised soon, as the Southern African country plans to conclude the negotiations. With increase job creation and boosting of revenue in sight, Botswana wants to have more gems cut and polished within its borders.
According to reports, this new agreement is expected to renew the current 10-year deal which was signed in 2011, and due to expire in January 2021.
The 2011 agreement was settled on the relocation of De Beers’ site and operations – professional, skills, equipment and technology – from London to Gaborone by 2013.
However, according to Lefoko Moagi, Botswana’s Minister of Mineral Resources, Green Technology and Energy Security, the government is seeking more access to the processing of the gemstone with this new deal.
In an interview statement, the minister stated, “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.”
He added that the country is “looking at April, not beyond, for all of this to happen and be successfully concluded.” He further emphasised the need for job creation and human capital development, stating that, “What we really need more is to see jobs coming through; we want to see young people participating in these jobs.”
De Beers in an email response said that it is “fully focused on continuing to be a dedicated partner to the people of Botswana, and to delivering” on their commitments.
Botswana is the world’s second-largest diamond producer. Gem accounts for gems for 90% of its foreign earnings. The government owns 15% of De Beers and has a 50% share in the Debswana mining company. As part of the existing agreement 2011, De Beers moved diamond sales to Botswana from London, and the government secured the right to sell 10% of Debswana’s production independently.
Although the country has recorded much success on economic growth in the past 3 years chiefly as a result of good resource management, the gap between what it makes from polished stones in comparison to the rough stones is wide. As of 2018, it made $846 million on the export of polished gems exported whereas the value of the rough stones involved in the process was worth $5.1 billion. This may account for why wants to derive as much benefit as possible from its mineral resources.
It is important for both parties to come to a compromise by April. Botswana accounts for more than two-thirds of De Beers’ production, it also depends heavily on these gems processed by De Beers for foreign earnings.