This new agreement is expected to drive Debswana, the joint venture between De Beers and the Botswana Government, through long-term investment.
The parties also agreed on a 25-year extension of Debswana mining licences until 2054.
It will focus on four key areas, namely demonstration of industry leadership, Debswana’s future, economic diversification, and job creation in the country.
As per the agreement, the share of Debswana supply sold through Okavango Diamond Company (ODC) will be increased to 50% over the ten-year duration, until 2033.
Under the new agreement, ODC will receive 30% of the mine’s production, which will be increased progressively to 50% by the final year of the contract to ensure a sustainable transition for both partners.
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The second aspect of the agreement is long-term capital investment in Debswana to establish it as one of the leading diamond producers in the world.
De Beers is also planning to invest up to $75m (BWP1bn) and further contribute a total of up to $750m (BWP10bn) over the next ten years, to accelerate economic diversification in the country.
In addition, the focus is to create the potential for thousands of jobs in the country, both within the diamond industry and in emerging sectors, to help in the development of a knowledge-based economy.
De Beers Group CEO Al Cook said: “For De Beers, it is a privilege to renew our half-century partnership with the people of Botswana. It is a partnership that is highly regarded around the world for the enduring role it has played in creating economic development and growth.
“Our transformative agreement reflects the aspirations of the country, secures the future of our Debswana joint venture, and reaffirms De Beers’ leadership position for the long term. The agreement represents our commitment to deliver investments in Botswana’s diamond production, Botswana’s diamond value chain, Botswana’s knowledge-based economy and, above all, the people of Botswana.”
The latest agreement puts a halt to the parties’ prolonged negotiations.
Botswana presently gets 25% of the rough diamonds mined under Debswana as part of a 54-year sales agreement. The country had previously hinted at cutting off ties with the miner if its production share was not increased.