Botswana intent on selling more diamonds without De Beers

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An open pit is seen at a Debswana mine, a joint venture between De Beers and Botswana's government, in Jwaneng, Botswana, Monday March 17, 2008. Botswana's dominance in the world diamond market is to be boosted with the opening of the Diamond Trading Compony Tuesday which will see the much sought-after gemstone being cut and polished in the southern African country. (AP Photo/Themba Hadebe)

Botswana will not drop its demand to sell a bigger share of the diamonds produced by its joint venture with DeBeers, President Mokgweetsi Masisi said on Thursday, raising the stakes in talks to renew a sales deal that expires in June.

Botswana and De Beers mine diamonds together under an equally-owned joint venture, Debswana.

Three-quarters of Debswana’s production, which was 24 million carats in 2022, is sold to De Beers. The balance is sold to state-owned Okavango Diamond Company(ODC), which was set up under the current 2011 sales deal as Botswana sought to market gems outside the De Beers system.

Botswana supplies 70% of De Beers’ rough diamonds.

Last month, Masisi threatened to walk away from talks to renew the sales deal unless Botswana gets a larger share of output from the joint venture. He did not specify the size of the share it sought.

Masisi told reporters on Thursday that Botswana had denied itself the opportunity to sell its own diamonds through the 54 year-old joint venture agreement.

He added that the experience of selling diamonds outside the De Beers system, which sells unpolished, or rough, stones, had shown that Botswana could get more revenue.

“Besides the fact that the diamonds are ours, it doesn’t make sense for us to continue to relegate ourselves to participating in the rough space only. So, it’s only logical that we want more and we are going to get more. But through negotiation,” Masisi said.

De Beers was not immediately available to comment.

Last month, a De Beers spokesperson told Reuters the company was confident that the Debswana partnership would continue, adding “the arrangement must make economic and strategic sense for both parties”.

De Beers says Botswana’s government receives more than 80% of returns from Debswana, including taxes and royalties.

The Anglo American Plc AAL.L unit, which also has mines in Canada, Namibia and South Africa, sold rough diamonds worth $4.3 billion in 2022, a 13% increase over the 2021 sales. ODC’s sales were $1.2 billion in 2022, up from $963 million in 2021.

Credit: Mark-Anthony Johnson