Botswana’s President Mokgweetsi Masisi warned on Sunday that if discussions to renegotiate a sales agreement fail, his country may cut ties with South African diamond giant De Beers.
The 2011 sales agreement that governed the terms of marketing diamonds produced by Debswana, a 50-50 joint venture between the government and De Beers, expires in 2021.
The parties extended it, citing the coronavirus outbreak as the cause for the delay in finalising negotiations, and it will terminate on June 30, 2023.
Masisi threatened at a rally of his ruling Botswana Democratic Party (BDP) in his home village of Moshupa, approximately 65 kilometres from Gaborone, “If we don’t reach a win-win situation, each side would have to pack up and go home.”
The mining corporation De Beers received 90% of the rough diamonds produced under the 2011 agreement, while Botswana, Africa’s largest diamond producer, received 10%. Botswana’s participation was increased to 25% in 2020.
Botswana’s participation was increased to 25% in 2020.
“We got a peek of how the diamond market works today, and we discovered that we received less than we should have,” said Mr. Masisi, who spoke in both English and Tswana.
“We also found out that our diamonds are bringing in a lot of profit and that the (2011) deal had not been fair to us,” he noted, before warning: “We demand a higher part of our diamonds. Business cannot continue in the same manner as previously.
Yes, De Beers is actually regarded as a luxury brand. Most people identify a luxury jewellery brand as one that creates pieces from high-quality gemstones and precious metals and charges a premium for them. This definition applies to De Beers.
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