De Beers, Botswana to renew vows

The longest and undoubtedly colossal business deal between Botswana Government and diamond selling giant, De Beers Group of companies, continues to flourish as the two parties start the re-negotiation of a new diamond sales agreement.

The current sales agreement cemented in 2011 ends in 2021 and the two bodies are scheduled to start working on the terms for the new agreement soon.

Speaking at the Diamond Conference, President Mokgweetsi Masisi enthusiastically highlighted that the two, Botswana Government and De Beers Group, will ‘renew their vows’. By this, the president was referring to the 10 year sales agreement that ends in two years.

Masisi said the relationship between the two was set in stone and there were no plans to part ways anytime soon, adding that the reason for the negotiations to start two years ahead of the expected resolution of the 2011 sales agreement was to avoid hasty decisions that could prove detrimental to either one or both parties. The landmark 10-year sales agreement saw De Beers Group transferring its London-based diamond trading activities to Botswana.

“It would shock the world and the diamond industry if the government and De Beers were to part,” said De Beers Group Chief Executive Officer, Bruce Cleaver, in an intimate media briefing that followed the President’s address.

Cleaver was responding to a query on whether the impending negotiations would lead to the two entities parting ways. Asked on the fundamentals of the negotiations for the sales agreement Minister of Minerals Eric Molale said the deal will be brokered behind tightly closed doors.

“Both teams are currently drafting heads of agreement and the public will know once everything has been finalised,” he said, much to the consternation of the attendants as they believed the public should be privy to the goings on of the deal as outcomes of such negotiations directly affect them.

A little over six years ago, the then De Beers Group Head of Media Relations Lynette Gould had told a Namibian reporter that over 80 per cent of all income realised by Debswana goes into government revenues, making it the single most important source of financing for Government-led development efforts in Botswana.

“In fact, we are unaware of any similar public-private partnership that has delivered similar value anywhere in the world,” she was quoted.

On the participation by citizens in the diamond value chain, Minister Molale said the outcome of the imminent agreement will push towards just that. “We are looking to have more local companies participating in the diamond mining industry, with particular reference to Cut 9 at Jwaneng mine,” he promised, advising that although it would be ideal to have locals dominate the industry, people should not lose sight of the fact that the diamond industry is an international industry. “The complexion of the company should reflect an international inclusion,” he cautioned.