(Bloomberg) — Botswana will acquire a 24% stake in Belgian diamond trader HB Antwerp, in a challenge to the southern African nation’s 50-year partnership with De Beers.
As part of the deal announced by President Mokgweetsi Masisi on Monday at the Belgian company’s offices in Gaborone, Botswana’s state gem trader, Okavango Diamond Co., will supply HB Antwerp with stones for five years. No value was given for the deal, which comes as Botswana pushes for a better agreement with De Beers, the world’s biggest diamond company.
De Beers and Botswana jointly own Debswana, which mines almost all of the diamonds in the country, the world’s biggest producer by value. While De Beers sells the gems in an uncut and unpolished state, known as rough, HB has a partnership with Lucara Diamond Corp., under which it pays polished prices for bigger stones from the company’s mine in Botswana.
“Today is the dawn of a new era in the diamond story of Botswana as we begin this journey with HB Antwerp,” Masisi said. “This partnership has the potential to be a game changer.”
In February, Masisi told a rally of his supporters that Botswana wants a larger share of revenue from the venture with De Beers: it currently gets 80% of the sales total when taxes and other charges are included. Debswana’s revenue was $4.6 billion in 2022, and the company has long-term plans to extend the lives of some of its mines. De Beers is a unit of Anglo American Plc.
In addition to higher prices, HB says its methods allow the origins of individual diamonds to be traced. That could encourage consumers to pay a premium as Botswana is politically stable and its gems are extracted largely using mechanised methods. Diamonds in other parts of the world are often mined in dangerous conditions by small-scale miners and, in some cases, sales proceeds have been used to finance conflict.
“This moment will be remembered as a stepping stone in our transformation into a global diamond centre and the global source of diamonds,” said Masisi, who has previously threatened to walk away from a deal with De Beers.
Source: https://www.bnnbloomberg.ca/botswana-to-take-stake-in-hb-challenging-de-beers-dominance-1.1900822
