Diamonds / Industry

On “D-Day,” De Beers and Botswana Stay Mostly Mum


At publication time, it was past office hours in both Gaborone and London—yet neither De Beers nor the Botswana government had issued any formal statement on what’s happening with the two parties’ contract, which was set to expire June 30.

UPDATE: At 12:29 a.m. Botswana time—five hours after this story was published—the two sides announced they had reached an “agreement in principle,” which includes a new 10-year-sales deal and 25-year mining license renewal. While details are being ironed out, the old sales agreement will remain in effect.

The current deal was signed in 2011 and was originally intended to run for 10 years. It has been extended three times, including last July, when it was extended through June 2023.

Many hoped that the drama would be over on June 30, only to contend with a sometimes-agonizing daylong wait. Still, there were signs throughout the day that a new agreement was likely.

A tweet sent out Friday by the ruling Botswana Democratic Party said, “Botswana wants to maintain its partnership with De Beers and is confident that ongoing talks for a new diamond sales agreement will succeed.”

Another tweet quoted Botswanan president Mokgweetsi Masisi as saying “he’s hopeful things will fall into place.”

On Friday afternoon, Gaborone-based journalist Alfred Masokola tweeted: “Both Government of Botswana and De Beers officials confident that an agreement will be reached/announced before midnight”—which would be around five hours after he sent the tweet.

Former De Beers Botswana CEO Sheila Khama tells JCK there is “no chance” of a breakup, since dissolving the partnership could be a lengthy legal process. “I wouldn’t read anything into the fact that they haven’t announced a new agreement yet. In 2006, we were two years late. Just this time, there’s a lot more attention.

“The fact that they haven’t announced anything means that they haven’t reached a final agreement. The two sides just have to work out their arithmetic. Sometimes it can be small detail, but that can be material and hold things up.”

On Thursday, the country’s minister of minerals and energy, Lefoko Moagi—who headed the large Botswana contingent that attended the JCK show in Las Vegas—referred to Friday as “D-day.”

“We are making headway,” he said. “We are working around the clock, really, just to make sure we can conclude a deal, or no deal…. We are very optimistic.… We believe we will gravitate towards something that will be a shared win, a win-win for all of us.”

But in a story in yesterday’s The New York Times, Moagi said, “Nobody’s ever ready for a divorce. But if you are told to get out of the house, you get out of the house. De Beers is not the only company in the world.”

The unusually public and protracted negotiations have set the diamond world on edge. De Beers and Botswana are 50/50 partners in Debswana, the country’s preeminent miner, and their relationship dates back 54 years. In 2011, De Beers moved its sales and sorting to Botswana.

De Beers declined comment, and Moagi did not respond to a request for comment.

Top: The Jwaneng mine in Botswana (photo courtesy of De Beers)


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By: Rob Bates

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