President of Botswana Mokgweetsi Masisi has once again attacked a 54-year-old agreement with the largest diamond producer in the world, De Beers, saying his nation would not relent in its demands for a better arrangement.
Botswana receives 25% of the rough diamonds produced via its collaboration with De Beers under the present agreement, which is set to expire the following month, while the firm receives the remaining 75%. Botswana is requesting a larger share of the revenues in negotiations to extend the agreement.
Debswana Diamond Company, in which the two partners own equal interests, is in charge of mining the stones.
70% of the raw diamonds used by De Beers come from Botswana.
Aside from “until death do us part,”
Masisi has increased the pressure it is applying to the massive diamond company since February. He was blunt in his remarks when he spoke on Thursday at Mmadinare, a town northeast of the capital, Gaborone.
Masisi remarked in Setswana, the native language, “This is not [about] ‘until death do us part’ or a permanent agreement.”
He suggested that the talks may get stale.
The alternative, according to Masisi, is to stand our ground and demand what is rightfully ours, no matter how difficult it may be to do so and even if it means losing in court.
De Beers refused to respond with a statement. The business earlier said, although conceding some difficulties, that it was sure a deal would be struck.
Masisi said that he would be prepared to lose over the delicate topic as Botswana’s general election is scheduled to take place next year.
I’m not afraid, he said. Yes, we are politicians and we always want to win votes, but if losing because of this problem is the only option, let it be.
The current discussions started in 2018 and were supposed to finish in 2021, but because to the epidemic, they were prolonged until June 30, 2023.
Masisi said that the sale of all rough diamonds produced in Botswana could bring in up to $15 billion year, but because of the De Beers agreement, the nation receives “only $7 billion, or $8 billion if we’re lucky.”
He said that Botswana is only allowed to trade in raw diamonds under the terms of the present arrangement. In addition to mining, sorting, cutting, polishing, making jewelry, and selling diamonds are all steps in the diamond value chain, according to him.
Masisi said that by participating in the value chain, Botswana might earn up to $100 billion, which is why it wants a better agreement with De Beers.
September 22, 2022, at the New York headquarters. Masisi has lambasted De Beers, a diamond manufacturer, and his country’s long-standing collaboration with them, warning that his nation would not relent in its demands for a better arrangement.
The president expressed his confusion at the practice of referring a dispute for arbitration to English courts in the event of a negotiation standstill.
People are unable to use our gems whatever they like, which keeps us in poverty while they get wealthy, he said. “We may still get close to $100 million with the $7 billion that we receive. No, no.”
Masisi said that Botswana could quickly end its poverty if it achieved a good agreement with De Beers.
These accords have undercut us in terms of resources, but now that we can read, our eyes are wide open, he said.
Methods of negotiation
Diamond expert Hans Merket of Belgium said that the industry was uneasy as a result of Botswana’s ongoing threats to renegotiate its agreement with De Beers.
The long-standing agreement between Botswana and De Beers may or may not be in risk, he added. “There is no doubt that many individuals in the diamond sector are becoming anxious as this goes on and we hear more forceful pronouncements from the Botswana side.
But most people anticipate that this will still be used as a negotiation tool to get a better contract rather than taking a chance on shattering it. De Beers and Botswana must split in order for common sense to prevail.
The value chain may be impacted by drawn-out negotiations, according to Merket, given Botswana’s significant involvement in the industry.
Debswana accounts for more than 90% of Botswana’s output of diamonds, which is the greatest by value. As a result, we are discussing nearly 25% of the value of all diamonds produced worldwide, he added.
“It is obvious that any issues with that supply would be felt globally, all the more so given that Russian diamond production, the other major producer nation, is becoming increasingly constrained as a result of Western sanctions in light of the war in Ukraine,” he added.
Only Russia produces more diamonds globally than Botswana. After Moscow’s invasion of Ukraine in 2022, customers have started to avoid stones mined in Russia.
