Al Cook, CEO, De Beers (left) shakes hands with Botswana President Mokgweetsi Masisi. (Photo: De Beers)

De Beers Group and the Government of the Republic of Botswana have reached an agreement in principle on a new 10-year sales agreement for Debswana’s rough diamond production through 2033 and a 25-year extension of the Debswana mining licenses through 2054.

Debswana operates four diamond mines in Botswana and is a 50:50 joint venture between De Beers and the Government of Botswana.

The new terms expand Botswana’s footprint and leadership position significantly across the diamond value chain. From the start of the new contract period, Okavango Diamond Co. (ODC) will receive 30% of Debswana’s production, progressively increasing to 50% by the final year of the contract. The Government of Botswana owns ODC.

“For De Beers it is a privilege to renew our half-century partnership with the people of Botswana,” Al Cook, CEO, De Beers Group, said. “It is a partnership that is highly regarded around the world for the enduring role it has played in creating economic development and growth.”

The new agreement, according to De Beers, will also progress the long-term capital investment required to secure Debswana’s position as one of the world’s leading diamond producers, and Botswana’s largest private employer, for decades to come.

To accelerate Botswana’s economic diversification, a $75 million Diamonds for Development fund will be created with an upfront investment by De Beers with further contributions over the next 10 years that could total up to $750 million, which will aim to create substantial additional value for the Botswana economy.

The new agreement secures existing jobs and could create tens of thousands of new jobs, both within an expanded Botswana-based diamond industry and emerging sectors, with a focus on supporting the growth of a knowledge-based economy.

While the two JV partners progress and implement the formal sales and mining agreements, the terms of the most recent sales agreement, which expired on June 30, will remain in place.

Anglo American owns De Beers. Given that both Anglo and the Government of Botswana are shareholders in Debswana, the final agreement will be subject to approval by Anglo American’s shareholders.