Botswana’s newly elected President, Duma Boko, has prioritized concluding negotiations with diamond industry giant De Beers, aiming to finalize a new sales agreement soon.
Under the terms of a provisional deal reached last year, De Beers, a division of Anglo American (AAL.L), would gradually increase Botswana’s share of diamonds from the Debswana joint venture to 50% over the next decade. Debswana, jointly owned by De Beers and the Botswana government, currently directs 75% of its production to De Beers. However, the agreement remains unsigned despite endorsement by the outgoing president, Mokgweetsi Masisi.
Addressing the stalled discussions, Boko, who assumed office following a decisive election win over Masisi’s party, expressed concerns that De Beers might abandon the deal altogether. “The way negotiations were handled could have risked our partnership with De Beers,” Boko stated in a televised address. He emphasized his administration’s commitment to addressing De Beers’ concerns to secure a “durable, sustainable agreement” that balances the interests of both sides.
De Beers, in an emailed response, affirmed its intention to maintain collaboration with Botswana’s government, aiming to support mutual goals as they always have.
Industry observers note that Anglo American is considering divesting De Beers as part of a larger business overhaul, with Botswana potentially increasing its 15% shareholding in De Beers. Analyst Paul Zimnisky commented that Botswana’s diamond sector is critical for the nation’s economy, suggesting that swift action from Boko’s administration on this issue is likely.
Meanwhile, global diamond demand remains sluggish, with Debswana’s rough diamond sales down approximately 52% in the first nine months of 2024, reflecting a broader luxury market downturn.
