01 Apr 2024

Government is pleased that negotiations with global diamond company De Beers on the finer details of the two parties’ long term partnership have been progressing well, and the country anticipates to increase its foothold as a participant in the industry, President Dr Mokgweetsi Masisi has said.

Welcoming CEO of De Beers Group, Mr Al Cook and De Beers Botswana resident director, Mr Neo Moroka, who paid a courtesy call on the Office of the President on Thursday, Dr Masisi said Botswana had sought a partnership that would result in the country deriving more benefit for its natural endowment.

Although the two parties established a good partnership over 50 years, regarded as a good model for government and business cooperation, he said prior agreements had included archaic agreements such as the non-compete clause that barred Botswana from expanding its footprint in the diamond trade.

But President Masisi said he was pleased that  government and De Beers had crafted a totally new relationship that moved away from elements of ‘imperialistic, neo-colonial’ past to one where both parties could flourish in the international diamond trade.

He said he had been notified that the negotiations were progressing well ahead of the set June 28 deadline, with both parties committed to a ‘totally new relationship’ that would be mutually beneficial.

In an interview after the meeting, Minister of Minerals and Energy, Mr Lefoko Moagi explained that negotiations between government and De Beers, which had been protracted over the past few years, made major strides and should be concluded by June this year.

He said last year, on  June 30 Botswana and De Beers signed a Statement of Principles, followed on  September  30 2023 by the Heads of Terms which provided detail and clarity on the commercial and operational aspects of the agreement in principle, including the Diamond for Development Fund, Debswana diamond supply apportionment and others.

“What is left is the Long Form agreement whereby now we will have the definitive, well laid out detail of what those agreements entail. For all intents and purposes our recent meeting in Kasane was successful, apart from a few technical issues, but, having extended the sales agreement to June this year, we do not want to go beyond our intended June 28 agreement,” Mr Moagi said.

He said the meeting with the President involved routine feedback to President Masisi on the ongoing negotiations and the timeliness set for the two parties to conclude and sign the Long Form Agreement.

“This was feedback from our meeting two weeks ago in Kasane, and having met on two other dates before that, we still have other key milestones we need to reach, and one of those involves regulatory frameworks such as the Financial Conduct Authority in London, which is a necessity for Anglo American (De Beers majority shareholder) as a listed company,” Mr Moagi said.Also speaking in an interview, Mr Cook said the ongoing negotiations would lead to a win-win situation for the two parties.

“I think this is a great agreement for Botswana as it takes away the old agreements that are now out of date and creates a partnership that is strong for the 2020s, and also great for De Beers as it creates value for our shareholders and allows us to create value in Botswana with the country,” Mr Cook said.

He said while seeking to continue being one of the world’s most profitable mining companies, De Beers was mindful of Botswana’s position to also reap more from the trade. 

“The partnership between Botswana and De Beers is one that is respected the world over because of its duration, more than 50 years and its quality.

What we are doing is ensuring a forward looking partnership, since some of the agreements put in place historically are no longer fit for purpose, for the nation that Botswana has become in 2024, and the vision President Masisi has for Botswana beyond the 2020s. 

The best partnerships are the ones that rejuvenate,” Mr Cook said.

He added that the De Beers position was that any restrictions on Russian diamonds in parts of the world should not have a bearing on how Botswana currently trades. Ends