Diamonds / Industry

Botswana President Raises Doubts About De Beers Deal


Botswana President Mokgweetsi Masisi (pictured) has made his sharpest comments yet about his country’s relationship with De Beers, fueling doubts that the two parties will be able to come to terms on a long-delayed new pact.

“If we don’t achieve a win-win situation, each party will have to pack its bags and go,” Masisi said at a Botswana Democratic Party (BDP) rally, according to Agence France Presse.

“We [received] insight into how the diamond market works, and we discovered that we had been receiving less than what we should get,” Masisi reportedly said. “We also discovered that our diamonds are making a lot of profit and that the [previous] agreement had not been beneficial to us.

“We want a larger share from our diamonds,” he concluded. “It can’t be business as usual.”

In 2011, De Beers and the Botswana government—which are 50-50 partners in the country’s primary miner, Debswana—signed a 10-year contract, which moved De Beers’ sights and sorting apparatus to the country’s capital of Gaborone from their longtime home in London.

The contract has been renewed three times, but is set to expire again in June. A January report in Botswana newspaper Mmegi said that a final deal was being held up by two unspecified “material” issues.

In response to President Masisi’s statements, De Beers spokesperson David Johnson told JCK via email: “We are proud of both the government of Botswana’s investment in De Beers Group and of our longstanding relationship in our joint venture partnership in Debswana—which spans more than 50 years—ensuring that the people of Botswana receive more than 80% of returns after taxes and royalties are factored in.…

“Our negotiations span more than just the sales agreement,” he continued. “They also include the future mining rights for Debswana, which are more complex and require more time to land on the finer details.

“President Masisi underlined that agreeing on a win-win outcome for both parties will be vital. That’s absolutely correct as our arrangements must make economic and strategic sense for both parties, and we are confident that our successful partnership will continue.”

Last week, in an interview with JCK, De Beers CEO Bruce Cleaver, who will be leaving that role Feb. 20, said he had “no doubt” the contract would be renewed before it expires again in June. (After he departs, Cleaver will become De Beers’ cochair and said he expects to be involved in negotiations going forward.)

Spokespersons for Masisi and the Botswanan government did not return a request for comment before publication time.

Top: Mokgweetsi Masisi speaking at the JCK show in Las Vegas in 2019 (Photograph by Camilla Sjodin)

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By: Rob Bates

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