Botswana and De Beers Sign Deal to Continue Rich Diamond Partnership

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A Botswana government official and the chief executive of De Beers, the international diamond conglomerate, signed interim agreements on Saturday to continue a lucrative, decades-long diamond mining partnership that had appeared to be breaking down in recent months.

Only minutes before a midnight deadline on Friday, the parties announced that after years of negotiations, they had agreed in principle on a deal to renew a partnership that supplies De Beers with most of its diamonds and Botswana’s government with the largest chunk of its revenue.

The government and De Beers said they were still working out the final details of the deal and did not share any of the terms that had been agreed to. In addition to an interim agreement, the parties signed a statement of principles on Saturday, a De Beers spokesman said.

The lack of details is bound to leave the public somewhat on edge, given that many in Botswana, a nation of 2.4 million people, have demanded that De Beers give the country a greater share of the diamonds. As it stands under the current arrangement, the Botswana government gets 25 percent of the rough stones mined in a joint venture with De Beers, which keeps the remaining 75 percent.

The government of Botswana, the world’s second largest diamond producer, hailed the agreements as a sweeping victory for the country, saying they would allow the southern African nation to achieve its long-term development goals.

“I must say with excitement that these are transformational agreements,” Lefoko Fox Moagi, the minister of minerals and energy, said on Saturday as he sat next to De Beers’s chief executive, Al Cook, to sign the deals. “These are talking to the aspirations of the people of Botswana.”

This year, Botswana’s president, Mokgweetsi Masisi, caused a stir when he made the unusual move of publicly criticizing the deal with De Beers, saying that his country was essentially being cheated.

“We must refuse to be enslaved,” he said in May at a community meeting in a rural village.

Mr. Masisi and other government officials demanded that Botswana receive more than 25 percent of the rough stones, and that De Beers make some investment in helping to expand other areas of the diamond industry in Botswana, including cutting and polishing, jewelry making and retail sales.

In challenging De Beers to give them more, Botswana officials were pressing a broader demand of African countries to get more from the natural resources that belong to them. There is a long history of countries on the continent losing out on their resource wealth to theft, corruption and mismanagement.

Mr. Cook said that Botswana government officials had been clear on the need for De Beers to invest beyond diamonds and in the knowledge-based economy, and to develop the diamond value chain and put the people of the country first.

“I believe that the deal that we have agreed does all of that,” Mr. Cook said during the signing ceremony.

Although details were not immediately made available, the government did say that the sales agreement, which deals with how the diamonds are allocated, had been extended to 2033. Separately, De Beers’s mining license was extended to 2054, giving the company some assurance that it would have a long-term future in the country.

Despite the government’s demands for a fairer deal, few would dispute that diamonds have already transformed Botswana in ways that many African nations can only envy.

In 1966, the year that De Beers first discovered diamonds in Botswana and that the country gained independence from Britain, Botswana was among the poorest countries in the world, with only about seven and a half miles of paved roads. Now, it is considered an upper-middle-income country with robust infrastructure and the sixth highest economic output per person, according to the World Bank. The partnership with De Beers produced about $2.8 billion in revenue for Botswana last year.

But the World Bank also ranks Botswana as one of the most unequal countries on the planet, and Botswana citizens and government officials have said that they deserve to earn more from the diamonds that are buried in their soil in order to address the lingering social ills.


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