De Beers and Botswana finalize a long-delayed diamond transaction

The Botswana government opened a new tab unit, De Beers, and signed a long-delayed diamond sales agreement with Anglo American (AAL.L) on Tuesday, expressing hope that the move would generate employment during a period of economic downturn.

In 2018, negotiations for the agreement began.

Although the two parties never formally signed a deal, they did agree on parameters in 2023 under the former president of Botswana.

When Duma Boko took office in October of last year, he made it a top priority to sign the agreement with De Beers.

Given that the economy of the Southern African nation is heavily reliant on the export of diamonds, the agreement is vital to Botswana’s success.

“We have a lot, and we believe it will help us in the future. President Duma Boko of Botswana stated during a signing ceremony in the country’s capital, Gaborone, that “this agreement is about you, the people of Botswana, and the jobs it will create.”

The agreement’s terms are largely in line with those decided upon in 2023.

Botswana has been receiving 25% of the rough stones from its Debswana joint venture with De Beers; over the following ten years, this percentage will rise to 50%.

In 2054, Debswana’s mining license will be renewed for a another 25 years.
Last year, Botswana’s economy is thought to have shrunk due to a protracted decline in the world diamond market.

The growing popularity of lab-grown diamonds and younger buyers’ disinterest in the precious stone have contributed to a decrease in raw diamond pricing, along with a glut of supply and a decline in demand.

The global diamond market’s growth and other sectors’ improved performance, however, are expected to boost the economy this year, according to the government.