The Government of the Republic of Botswana and De Beers Group have announced that they have reached an agreement in principle on a new 10-year Sales Agreement for Debswana’s rough diamond production through to 2033 and a 25-year extension of the Debswana mining licences through to 2054.
The transformational new agreement between the Botswana Government and De Beers reflects the aspirations of the people of Botswana, propels both Botswana and De Beers forward, and underpins the future of their Debswana joint venture through long term investment.
The agreement represents a new chapter in an enduring diamond partnership by focusing on four key areas of value:
- Industry leadership: Significantly expanding Botswana’s footprint and leadership position across the diamond value chain, including a transition to increasing the share of Debswana supply sold via Okavango Diamond Company (ODC) to 50 per cent over the duration of the agreement.
From the start of the new contract period ODC will receive 30 per cent of Debswana production, progressively increasing to 50 per cent by the final year of the contract, ensuring a sustainable transition path for both partners.
- Debswana’s future: Progressing the long-term capital investment required to secure Debswana’s position as one of the world’s leading diamond producers, and Botswana’s largest private employer, for decades to come.
- Economic diversification: Accelerating Botswana’s economic diversification through the creation of a multi-billion Pula Diamonds for Development Fund, with an upfront investment by De Beers of BWP 1 billion (c. $75 million) and further contributions over the next 10 years that could total up to BWP 10 billion (c. $750 million) – which will aim to create substantial additional value to the Botswana economy.
- Botswana jobs: Creating the potential for tens of thousands of new jobs in Botswana, both within an expanded Botswana-based diamond industry and emerging sectors, with a focus on supporting the growth of a knowledge-based economy.
Al Cook, CEO, De Beers Group, said: “For De Beers it is a privilege to renew our half-century partnership with the people of Botswana. It is a partnership that is highly regarded around the world for the enduring role it has played in creating economic development and growth. Our transformative agreement reflects the aspirations of the country, secures the future of our Debswana joint venture, and reaffirms De Beers’ leadership position for the long-term. The agreement represents our commitment to deliver investments in Botswana’s diamond production, Botswana’s diamond value chain, Botswana’s knowledge-based economy and, above all, the people of Botswana.”
While the partners progress and implement the formal Sales and Mining Agreements, the terms of the most recent Sales Agreement (which expired on 30 June) will remain in place.