The Botswana government has finalized a landmark diamond sales agreement with the mining giant De Beers, concluding nearly seven years of intricate negotiations. This accord is vital for Botswana’s economy, as it enhances the country’s share in diamond sales via Debswana, a collaborative venture with De Beers, which is part of Anglo American.
Positioned as a hub of diamond production, Botswana is the top producer by value and second only to Russia by volume. Diamonds are crucial to Botswana’s economy, accounting for about 80% of exports and a significant portion of GDP, according to the International Monetary Fund. However, diminishing prices and demand have adversely affected the nation’s economic landscape. This economic downturn contributed to the historic 2019 election upset when a party that had held power since independence was voted out.
Under the new sales agreement, Botswana will benefit from an increased diamond sales share—starting at 30% (up from 25%) for the first five years and rising to 40% in the subsequent five years. The agreement includes a provision for a potential five-year extension, which would see equal sharing of sales revenue between the two entities. In response, De Beers has been granted a 25-year extension on its mining licenses in Botswana, stretching its operations to 2054.
The parties had previously reached a broad consensus in 2023, but formalizing this agreement was a primary agenda item for Botswana’s President, Duma Boko, who assumed office post the October elections. “We are people of durable relationships,” Boko remarked at the signing ceremony, expressing confidence that this deal has laid a solid foundation for the future.
Botswana has been home to some of the largest diamond discoveries in recent times, including a massive 2,492-carat stone unearthed last year. Despite such monumental finds, Debswana’s diamond sales saw a significant decline in 2024, registering at $1.53 billion compared to $3.19 billion in 2023. This downturn illustrates the vulnerabilities in Botswana’s economy due to its heavy reliance on diamond revenues.