De Beers announced on Monday that it has concluded negotiations with the Botswana government on a rough diamond sales agreement and secured an extension of mining licences for its joint venture until 2054.
“The signing will be in the next few weeks...the government of Botswana will be hosting the signing,” said De Beers CEO Al Cook to Reuters news agency.
Debswana, a 50:50 joint venture between Botswana and De Beers, currently sells 75% of its diamond output to De Beers. In 2023, both parties reached a 10-year agreement to gradually increase the government's share of production to 50%.
However, the deal was never signed during the tenure of former Botswana President Mokgweetsi Masisi.
On 23rd January, new President Duma Boko, who took office last October, expressed hopes of swiftly finalising the agreement. De Beers confirmed in a statement that the concluded negotiations align with the terms agreed upon in 2023.
Talks on the matter originally began in 2018.
President Duma Boko stated that discussions to increase Botswana's 15% ownership stake in De Beers are “going well.”
Anglo American is planning to divest De Beers as part of a broader restructuring strategy to concentrate on copper and iron ore mining, Reuters reports.
According to sources, potential options include a public listing or a sale to a sovereign wealth fund or strategic investor.
However, the spin-off of the 137-year-old diamond producer faces challenges amid weakened diamond prices.
Rough diamond prices have dropped by approximately 20% since early 2023, according to the Zimnisky Global Rough Diamond Price Index. The decline has been driven by the growing popularity of lab-grown diamonds and shifting preferences among younger consumers away from traditional diamonds.
However, Cook remains optimistic that the deal with Botswana will strengthen their marketing efforts.
“For the country of Botswana, we can open up a new marketing direction, which is to tell the origin story of the diamond,” he commented.