President of Botswana, Duma Boko announced that his government has secured a diamond extraction and sales agreement with De Beers, providing stability to the country's gem-dependent economy.
The terms of the agreement were finalised by midnight on 24th January and will be revealed shortly, Boko said in a Tuesday interview.
As the world’s largest producer of rough diamonds by value, Botswana's diamond industry is a major source of revenue, with most of the country's diamonds mined by Debswana, a joint venture between De Beers, a subsidiary of Anglo American Plc, and the government.
“The issue with De Beers has been settled,” Boko said in Dar es Salaam, Tanzania, where he is attending an energy conference. Last week, at the World Economic Forum in Davos, Switzerland, he hinted that an agreement was close and confirmed that he had honoured his commitment to finalise it, Bloomberg reports.
During his election campaign, Boko criticised his predecessor Mokgweetsi Masisi for his handling of negotiations with De Beers to renew the longstanding partnership between Botswana and the world’s largest diamond company. Boko claimed that Masisi's approach had nearly led De Beers to walk away from the deal, prompting him to push for reopening the talks.
Boko's Umbrella for Democratic Change coalition defeated Masisi’s Botswana Democratic Party, which had governed the country since its independence from the UK in 1966.
The new agreement didn’t contain “any major changes, just a little tweaking of things here and there,” he said.
Under the provisional terms of a 10-year agreement announced by Botswana’s previous administration in July, the state-owned diamond trader was set to receive 30% of Debswana’s output, while the government was to secure 10 billion pula ($720 million) in development funding.
At the time of its independence, Botswana was an arid, underdeveloped nation. However, the discovery of diamonds in 1967 allowed it to transform into the richest country per capita on Africa’s mainland, according to the World Bank.
Despite this success, a prolonged downturn in the global diamond market and competition from lab-grown gems have strained its economy. Boko stated that the new agreement will bring stability, and he believes economic growth will follow.
“We appreciate the threat posed by lab-grown diamonds. I don’t want to give them the privilege of calling them diamonds. Diamonds are natural. We will then market our diamonds in terms of their provenance and of the story behind the diamond,” he said.