Botswana: President says a favourable diamond deal with De Beers ‘could eradicate poverty in the blink of an eye’
‘Botswana President Launches Another Attack Against De Beers’ 27 May 2023
Botswana President Mokgweetsi Masisi has again criticized a 54-year-old partnership with world-leading diamond producer De Beers, saying his country will not back down on demands for an improved deal. Under the current arrangement, due to expire next month, Botswana gets 25% of rough diamonds mined under its partnership with De Beers, and the company gets the rest. Negotiations on a renewal of the pact, in which Botswana is seeking a higher stake of the profits, are underway. The stones are mined by Debswana Diamond Company, in which the two partners own equal shares. Botswana provides De Beers with 70% of its rough diamonds.
… He hinted that the negotiations might stall. “It is either we accept the situation as it is and continue getting leftovers, or alternatively we dig in and, no matter how tough it is, demand what is ours, even if we lose through litigation,” Masisi said. No comment could be obtained from De Beers. The company has previously indicated it was confident a deal would be fleshed out, while acknowledging some complexities. With Botswana due to hold its general election next year, Masisi said he would be willing to lose over the sensitive issue. “I am not scared,” he said. “Yes, we are politicians and always lobby for votes, but if it means losing as a result of this issue, let it be.”… Masisi said trade in all rough diamonds mined in Botswana could net up to $15 billion a year, but under the De Beers deal, the country gets “only $7 billion, or $8 billion if we are fortunate.”
Also, he noted, the current agreement restricts Botswana to trading only in rough diamonds. He said the country wants to be involved in the diamond value chain, which includes not just mining but also sorting, cutting, polishing, jewellery creation and sales. Masisi said involvement in the value chain could earn Botswana nearly $100 billion, which is why it wants a better deal with De Beers… Masisi said that if Botswana reached a favorable deal with De Beers, poverty in the country could be eradicated in the blink of an eye. Merket said that because of Botswana’s prominent role in the sector, the value chain can be affected by protracted talks… "It is clear that any troubles with that supply would be felt globally, all the more given that diamond production from Russia, the other big producer country, is increasingly cornered following Western sanctions in the light of the war in Ukraine," he said.