WATCH: Botswana to renew agreement with De Beers in diamond industry
Economy / 5 November 2019, 12:06pm / Mary-Jane Mphahele
JOHANNESBURG - Newly appointed Botswana President Mokgweetsi Masisi has announced that his government is in negotiations with De Beers, mining giant, to renew a sales agreement to allow the trading of diamonds between the two parties.
Masisi made the announcement at the Diamond Conference in Gabarone. The conference is the only diamond specific forum on the African continent, providing a key platform for engagement for the global diamond industry.
The conference is attended by ministers, senior government representatives, business leaders and diamond industry experts to promote and strengthen co-operation.
Masisi said due to the good relationship the country has had with De Beers, they will renew their sales agreement which is set to expire in 2020.
"Together, we have built an economy which has helped transform our country to a special category of prudently run and managed economies in the world.
" That is why my government and De Beers are in negotiations for the next sales agreement which is set to continue when the current one expires in 2020," said Masisi.
Debswana has for the past 40 years sold its diamonds exclusively to De Beers, which in turn shipped the diamonds to London for aggregation and selling to its customers known as Sightholders.
In September 2011, the Government of Botswana and De Beers announced a landmark 10-year sales agreement that would see De Beers transfer its London-based diamond trading activities to Botswana by the end of 2013.
The new agreement allows De Beers’ Sightholders to purchase their rough diamonds from Gaborone and initiate the much-needed critical mass of secondary diamond trading in Botswana.
Speaking to Bloomberg earlier this year, Masisi said the conclusion of an accord is crucial for both Botswana, which relies on diamonds for almost a fifth of its gross domestic product, and for the Anglo American Plc unit that gets about two-thirds of its gems from the southern African nation.
Masisi is also pushing for the industry to create more jobs and is “dead determined” that more diamonds be cut and polished in the country.
He also stressed that the communities in whicb the mining activities take place in must be placed in a position to benefit from the diamonds.
"We have an obligation to motivate favorable development policies and robust business practices which accomodate the interest of these communities in the whole scheme of diamond mining and production," said Masisi.
De Beers CEO Bruce Cleaver said though they are not in a position to give details on the agreement, they are certain that it will be mutually beneficial to the two parties.
Cleaver says the younger generation is the largest buyers of diamond currently, with women leading the sales. Remarks that the younger generation has become financially intelligent. @busrep@BeltRoadTV#diamondconf19