De Beers reaches last-minute deal with Botswana on diamond sales

De Beers reached an agreement in principle to keep selling rough diamonds from Botswana for another decade, securing the crucial partnership after years of tense negotiations just as the latest deadline for a deal expired.

The arrangement between gem giant De Beers and the world’s second-largest producer is crucial for both sides, and plays a central role in the global diamond supply chain. President Mokgweetsi Masisi has been increasingly vocal in criticising the 54-year-old relationship, threatening to walk away if it didn’t provide more benefit to Botswana, including that the country receive a larger allocation of the diamonds produced.

The two sides didn’t provide details of the sales agreement in a statement. Under the current arrangement, Botswana’s state-owned diamond trader is entitled to 25% of output from Debswana, the De Beers unit that generally accounts for about two-thirds of the group’s annual production. The agreement in principle also includes new 25-year mining licenses for Debswana.

De Beers, a unit of Anglo American Plc, has been negotiating with the government for a new deal since 2018 — the last agreement expired in 2020 but was extended several times, initially because of the pandemic. While the partners finalise the implementation of the formal sales and mining agreements, an interim agreement will preserve the terms of the most recent sales agreement that expired on Friday.

“The transformational new agreements between Botswana 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 two sides said in the statement.