Monday, June 24, 2024

Masisi hints at possible stalemate over Diamond sales agreement

Botswana and De Beers may fail to reach an agreement before the negotiation deadline on June 30. The ongoing negotiation period was extended for  12 months last year June 30.

President Mokgweetsi Masisi last week hinted at a possible stalemate and litigation over the sales agreement.

“Our agreement with De Beers is very restrictive to us. We signed it at a time when we didn’t know much, but now our eyes are open,” Masisi said during a kgotla meeting in Mmadinare last week.

“Even if we lose the litigation, our diamonds will remain ours and we will never give in. If I am going to lose votes because of this issue, then so be it,” said Masisi, speaking in Setswana.

Botswana is demanding a number of concessions including an increase in the quota of the Debswana run of the mine to the government of Botswana. The Botswana negotiating team is adamant that Botswana has a 50-50 partnership with De Beers and the run of mine allocation should reflect that partnership. Masisi  wants Botswana to sell more of its diamonds outside the De Beers channel.

The Botswana negotiating team is also pushing for Botswana diamonds to be de-aggregated from the De Beers haul and marketed as Botswana diamonds.

Botswana also wants the diamond prospecting exclusivity that has been granted to De Beers cancelled and that diamond prospecting should be opened up to Batswana.

The government further wants to repatriate thousands of Botswana jobs which have been exported through downstream diamond activities like retailing and jewellery manufacturing.

The Botswana government also wants De Beers to increase its corporate social responsibility budget.

Masisi last week indicated that Botswana will not back down on demands for a bigger share of rough diamonds from its joint venture with De Beers.

Botswana and De Beers mine the precious stones through their equally owned, 54-year-old mining venture, Debswana Diamond Co. The current diamond sales deal, in place since 2011, has been extended three times since 2020 but is set to expire next month.

De Beers, a unit of Anglo American, gets 75% of Debswana’s production, which was 24-million carats in 2022. The balance is sold to State-owned Okavango Diamond Company, a vehicle established in 2011 as Botswana began moves to independently sell some gems outside of the De Beers system.

Masisi has previously threatened to walk away from the talks if Botswana does not get a bigger share of Debswana’s output for marketing outside the De Beers system.

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