Botswana's government finalised a long-delayed 10-year diamond sales agreement on Tuesday with Anglo American through its De Beers unit, which includes a potential five-year extension to the initial agreement.

As part of the final deal, Botswana's state-owned Okavango Diamond Company (ODC) will hold a 40% share in the production of Debswana - its 50-50 joint venture with De Beers - by the end of the agreement, a revision from the previous provisional 50%.

According to a joint statement from Botswana's government and De Beers, ODC's share could increase to 50% during the proposed five-year extension period.

In the first five years, ODC will sell 30% of Debswana’s output, up from the previous 25%.

Meanwhile, under the provisional agreement with the previous Botswana government, ODC’s share was set to reach 50% by the end of the 10-year pact, according to Reuters news agency reports.

Negotiations for the deal began in 2018, but an agreement announced in 2023 was never officially signed.

Botswana's President Duma Boko, who took office last October, prioritised finalising the deal with De Beers, deemed crucial for the southern African nation, as its economy heavily relies on diamond exports.

“We have us a good deal and we trust that it will carry us into the future. To the people of Botswana, this agreement is about you, about the jobs it will create,” Boko said during the signing ceremony in Gaborone.

As part of the agreement, Debswana's mining licences, which were set to expire in 2029, will now be extended until 2054.

The government of Botswana has stated that the economy contracted last year due to a prolonged slump in the global diamond market.

Declining demand, a supply surplus, the growing popularity of lab-grown diamonds, and a shift among younger consumers away from natural diamonds have all contributed to a decrease in rough diamond prices.

However, the government is optimistic that the economy will recover this year, driven by an improvement in the global diamond market and stronger performance from other sectors.