The president of Botswana Mokgweetsi Masisi, the leading diamond producing African country is ready to sever its partnership with the South African diamond company De Beers unless they agree to a new 50-50 joint venture.
The existing agreement between the UK-based company and the government of Botswana is soon to expire in June later this year. Under the 2011 agreement, De Beers held exclusive rights to 90% of the rough diamonds produced while the country itself only held 10%. Botswana auctioned its shares through its Okavango Diamond Company and brought in only $ 4B yearly. In 2020, Botswana’s share was raised to 25% after years of renegotiations.
De Beers also holds a 50-50 joint agreement of the Debswana diamond mining company with the government of Botswana. To put in simple words, both entities own half of the mining company, while De Beers held 90% of the marketing of the stones before it was decreased to 75% in 2020.
President Masisi says his country is prepared to walk away from the partnership unless a more favorable agreement that benefits his country becomes the new beginning. De Beers will have to say goodbye otherwise.
While addressing the ruling Botswana Democratic Party supporters late this past Sunday, Masisi referred to the 2011 agreement as exploitative and unfair to Botswana.
“We now know how the diamond industry operates. We used to receive 10% of the stake, but now, under my leadership, we are receiving 25%,” he said. The president is confident in his country’s stance to push for 50%.
During his discourse to the ruling party, the president mentioned that for years, his government was unaware of the market profit of their precious resources down the supply chain. Now they’re ready to make a stance and take back control of their possessions.