Tuesday, August 3, 2021

Government remains secretive about negotiations team in De Beers contract talks

Botswana’s representatives at the negotiation table of the diamond production and sales contract talks with De Beers remains a closely guarded secret. Attempts by Sunday Standard to acquire a list of Botswana’s team proved futile as the Ministry of Minerals would not release the information.

“Note that the Ministry is not in a position to respond to details pertaining to Botswana Government and De Beers Group negotiations until Government and De Beers make an official communications,” the Ministry said following a Sunday Standard inquiry.

“However you can note that as the Minister has already said during his Committee of Supply Speech ‘the De Beers Group and the Botswana Government have started renegotiations of the Sales Agreement and the Master Agreement in May 2019. The negotiations are on-going, and after suffering delays on account of COVID-19 restrictions, it is anticipated that the negotiations will now be concluded during 2021.”

The 10 year Sales Agreement was extended for another year ending December 31st, 2021 due to Covid-19 travel restrictions. The extension was done to allow for completion of the negotiations by the two parties.

While the composition of the Botswana team remains a secret, recent redeployments of top public officers by President Mokgweetsi Masisi have raised concerns about how the changes may affect the ongoing negotiations. Permanent Secretary (PS) in the Ministry of Minerals, a key stakeholder in the diamond business, was removed from his position recently. The PS, Mmetla Masire, is reportedly expected to take over the vacant top post at Okavango Diamond Company, another strategic industry player in the diamond industry. Permanent Secretary to the President (PSP) Elias Magosi was also moved from his position and redeployed to Ambassador-at-large.

The PSP could also be one of the government’s representatives in the diamond negotiations. Debswana Mining Company, a partnership between De Beers and the Botswana government, has also been without a substantive Managing Director.

De Beers looks to extend its sales agreement with Botswana in which the company sells diamonds from the country’s mines, the biggest in the world by value, for another 10 years.

The current contract, now in its 11th year, was due to end in December 2019 but for logistical challenges brought upon by the outbreak of coronavirus pandemic. Negotiations between De Beers Group and the Botswana government have always remained highly confidential.

The negotiations between the two have always been a source of contention. It took years to negotiate the current deal. The contentious talks have in the past led to the world’s top diamond producer De Beers making major concessions such as the decision to move all its diamond selling and sorting activities to Gaborone from London. The move creative many jobs for Batswana.

Addressing the media during the 2020 diamond conference Bruce Cleaver, De Beers Group chief executive officer, said a disclosure on the negotiations would only be made once the two parties have signed all the agreed terms.

“The CEO expressed optimism that the negotiating parties, comprising the De Beers executive team and senior government representatives, would reach common ground that would be fair to both parties,” government newspaper Daily News reported in 2020.

“His sentiments were shared by permanent secretary in the Ministry of Mineral Resources, Green Technology and Energy Security, Mr Mmetla Masire, who said although certain aspects of the agreement might remain confidential even after signing, it would be structured in such a way that it was open and fair to all parties,” the paper said.

De Beers Group employs more than 20,000 people across the diamond pipeline and is the world’s largest diamond producer by value, with mining operations in Botswana, Canada, Namibia and South Africa. De Beers Group is a member of the Anglo American plc group.

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