Duma Boko, Botswana’s newly elected president, announced on Friday his intention to finalize negotiations for a new sales agreement with the global diamond powerhouse De Beers as soon as possible.
Last year, De Beers, a subsidiary of Anglo American, reached an agreement that would gradually increase the Botswana government’s share of diamonds from the Debswana joint venture to 50% over the next decade.
Currently, Debswana, jointly owned by Botswana and De Beers, sells 75% of its diamond output to De Beers.
Despite the previous government’s efforts to promote the agreement, it has yet to be officially signed.
Boko, who assumed office following a decisive victory over the outgoing president Mokgweetsi Masisi, expressed concerns that De Beers might be considering backing out of the negotiations altogether.
“This is a very precarious situation for our country,” he stated.
He emphasized the need for his administration to engage with De Beers to address any concerns they may have, stating, “The first step is to connect with the other party.”
Boko noted that effective negotiations require compromise, leading to a sustainable agreement that benefits both sides.
A spokesperson for De Beers responded via email, affirming their commitment to collaborating with the Botswana government to achieve shared goals.
Anglo American is in the process of restructuring and exploring options to divest De Beers.
In July, Masisi mentioned that the Botswana government might increase its stake in De Beers from the current 15%.
According to diamond industry analyst Paul Zimnisky, the conclusion of Botswana’s election may simplify this divestment process.
Zimnisky added, “Diamonds are by far the most significant industry in Botswana, so this is undoubtedly a top priority for the new president. I anticipate seeing progress on this front soon.”
However, like many luxury commodities, diamond prices have suffered due to declining global demand, with Debswana’s rough diamond sales dropping approximately 52% in the first nine months of 2024, according to the latest data from Botswana’s central bank.
