KEY POINTS
- Botswana’s new president, Duma Boko, aims to finalize the stalled De Beers diamond sales agreement swiftly.
- Mobile transactions reached $200 billion in 2020, contributing up to 5% of GDP in some countries.
- Anglo-American’s potential De Beers exit could reshape Botswana’s diamond sector amid falling global demand and price declines.
Botswana’s new president, Duma Boko, said Friday that his administration aims to finalize a long-pending diamond sales pact with De Beers, calling the deal essential to stabilizing Botswana’s economy.
Boko, who took office following his victory in Botswana’s recent election, underscored the need for “re-engagement” with De Beers to repair a partnership he said was strained under the previous administration’s handling of negotiations.
Botswana to secure a 50% diamond share in Debswana
The proposed pact with De Beers, a subsidiary of Anglo American, would gradually increase Botswana’s share of diamonds from Debswana, the 50-50 joint venture between De Beers and Botswana’s government, to 50 percent over the next decade.
Although the prior administration, led by former President Mokgweetsi Masisi, negotiated the deal and advocated for its benefits, the agreement remains unsigned.
In a televised statement, Boko expressed concerns about De Beers’ reluctance to finalize the agreement, warning that the company “considered walking away.” Boko added, “The first thing that needs to be done is to engage the other party. A proper negotiation involves compromise, where both sides gain something.”
A spokesperson for De Beers responded, saying, “We will continue to work with Botswana’s government in support of shared objectives, as we always have.”
Pressures on both sides amid industry slump
Anglo-American is reportedly looking to divest its stake in De Beers as part of a broader restructuring, which analysts say could impact the global diamond market. Former President Masisi indicated in July that Botswana may increase its 15 percent stake in De Beers, which is a major contributor to the national economy.
Amid a global decline in demand for luxury goods, diamond prices have fallen significantly. Botswana’s central bank recently reported a 52 percent drop in Debswana’s rough diamond sales for the first nine months of 2024.
Industry analyst Paul Zimnisky emphasized the stakes for Botswana, where diamonds are a primary export and central to the economy. “Diamonds are by far the most important industry for Botswana,” Zimnisky said, adding that the country’s new administration is likely to make this agreement a priority.
For President Boko, concluding the pact with De Beers represents a crucial step toward ensuring stability in Botswana’s diamond sector amid uncertain market conditions.
