4 November 2024
DE BEERS’ plans to sign a new diamond sales agreement with Botswana would be boosted by last week’s election result in which President Mokgweetsi Masisi’s party suffered a heavy defeat.
Botswana Democratic Party (BDP) lost for the first time in 58 years – a development that would put pressure on Duma Boko, head of the victorious Umbrella for Democratic Change (UDC) coalition to conclude the deal with De Beers.
“Diamonds by far represent the most important industry for Botswana, so this has to be one of the front and centre issues for the (new) president,” Paul Zimnisky, an independent diamond analyst, told Reuters on November 1.
“I would expect to see progress on this front now,” said Zimnisky.
De Beers, 85% owned by Anglo American, last year agreed a new diamond sales pact, which would see the government’s share of diamonds from the Debswana joint venture gradually increase to 50% over the next decade. Debswana Diamond Company, equally owned by Botswana and De Beers, currently sells 75% of its output to De Beers.
Although the Botswana government and Masisi touted the merits of the deal, it has yet to be signed, said Reuters. Boko, who took office on Friday, said De Beers had been “considering walking away, not signing at all … (a) very dangerous position to be in as a country.”
“The relationship with De Beers could have been damaged by the way the negotiations were handled,” he said in a televised statement.
“The first thing that needs to be done is to engage the other party.”
The coalition’s victory reflected voters’ anger over economic stagnation linked to a decline in the diamond trade by handing victory, said Reuters. Botswana has used the economic proceeds of its diamond industry judiciously over the years, but in recent times a collapse in market has caused the country’s economic growth to plummet, projected to fall to 1% this year. Meanwhile, unemployment rose to 28%, said the newswire.
“We are an economy that depends on diamonds… So we’ve got to try and safeguard the goose that lays for us the golden egg in the short to medium term, at the very least,” Boko said.
Source: https://www.miningmx.com/trending/58881-de-beers-diamond-pact-boosted-by-shock-botswana-result/
