De Beers Renews Two Major Contracts
By Rob Bates, Senior Editor -- JCK Online, 3/1/2001 2:00:00 AM
De Beers recently renewed contracts with its two best friends in Africa-the governments of Namibia and Botswana-ensuring that the company will continue to control a sizable chunk of the diamond market for years to come.
De Beers and the government of Botswana, the world's largest diamond producer by value, recently signed a new contract that lets De Beers market the country's diamonds until 2005. Debswana, the joint venture between De Beers and the government, plans to sell in excess of $2 billion in diamonds this year.
De Beers also inked a new deal with Namibia, where diamonds also are sold by a De Beers-government joint venture. The new deal gives the Namibian government a seat on De Beers' board of directors. The government of Botswana currently holds two seats on the De Beers board.
While relations with Namibia and Botswana seem strong, De Beers has hit another rough patch in its relations with Russia, a perennial thorn in its side. After Russian authorities publicly speculated about leaving the company, the two sides began negotiations 15 months early, to avoid a repeat of past last-minute wrangling. Russian authorities say they want significant changes to the contract, given De Beers' "supplier of choice" initiative.
