Botswana plans to conclude negotiations with De Beers, a British Mining company, on a diamond sales agreement by the end of April. The plan is for Botswana to have more gems cut and polished within its borders with aims to create more jobs and boost revenue.
This new agreement seeks to renew the current 10-year deal signed in 2011 with new term. The former deal is due to expire in January 2021. The 2011 agreement concluded on the relocation of De Beers’ site and operations – professional, skills, equipment and technology – from London to Gaborone by 2013. But according to the country’s Minister of Mineral Resources, Green Technology and Energy Security, Lefoko Moagi, the government is seeking more access to the processing of the gemstone with this new deal.
In an interview statement by Moagi reads, “We now want further to move into the value space; the bottom end of the business which involves your valuation, your pricing, cutting and polishing, marketing, selling, jewellery making.” He added that the country is “looking at April, not beyond, for all of this to happen and be successfully concluded.”
Emphasising the need for job creation and human capital development, a statement by the minister reads, “What more really we need is to see jobs coming through, we want to see young people participating in these jobs.”
De Beers in an email response said that it is “fully focused on continuing to be a dedicated partner to the people of Botswana, and to delivering” on their commitments.
Botswana is the world’s second-largest diamond producer. Gem accounts for gems for 90 percent of its foreign earnings. The government owns 15 percent of De Beers and has a 50 percent share in the Debswana mining company. As part of the existing agreement 2011, De Beers moved diamond sales to Botswana from London, and the government secured the right to sell 10 percent of Debswana’s production independently.
Although the country has recorded much success on economic growth in the past 3 years chiefly as a result of good resource management, the gap between what it makes from polished stones in comparison to the rough stones is wide. As of 2018, it made $846 million on the export of polished gems exported whereas the value of the rough stones involved in the process was worth $5.1 billion. This may account for why wants to derive as much benefit as possible from its mineral resources.
It is important for both parties to come to a compromise by April. Botswana accounts for more than two-thirds of De Beers’ production, it also depends heavily on these gems processed by De Beers for foreign earnings.