Botswana and De Beers finally signed a new 10-year sales agreement last Friday, which ended a 100 year tradition of sending African diamonds to London.
The agreement, backdated to January 1 2011 would see the diamond giant transfer its rough diamond sales activity to Gaborone.
Although the Diamond Trading Company (DTC) would relocate its sights and sales operations - including professionals, skills, equipment and technology - from London to Gaborone by end of 2013, it would (from its new base in Botswana) aggregate production from De Beers’ mines including South Africa, Namibia and Canada.
These would be sold to international Sightholders.
DTC Botswana would also continue to sort and value Debswana’s production before selling it on to the DTC.
De Beers said DTC would continue to support the domestic cutting and polishing industry in Botswana, and would increase its commitment by making more diamonds available for manufacturing businesses operating in the country.
The agreement, De Beers said, would also provide for an independent sales outlet for the Botswana Government, which would begin this year at 10 percent of Debswana’s run of mine production and rise to 15 percent over a five year period.
“The transformation that this agreement sets out is testament to our belief in the future of Botswana, and is a clear acknowledgment that De Beers’ success is only possible with a profound understanding that the aspirations of our partners must be at the core of our business,” said De Beers chairperson Nicky Oppenheimer.
“Botswana has preserved and enhanced a highly successful route to market, focused on maximising the value of her natural resource, and De Beers has secured long-term and uninterrupted access to the largest supply of diamonds in the world.”
He said this was a once-in-a-generation opportunity for Botswana and De Beers to shape the future of the diamond industry, adding that they would continue providing their sightholders a “quality of supply they expect while pushing beneficiation to greater levels than ever seen before”.
Botswana Minerals, Energy and Water Resources Minister Ponatshego Kedikilwe said his country had renewed one of the most successful public/private partnerships in the world.
“This agreement, and the tangible outcomes it will deliver, will enable Botswana to achieve its aspiration to be a major diamond centre engaged in all aspects of the diamond business,” he said.
“The agreement gives us direct access to market, which will be helpful for the successful development of the downstream diamond industry in Botswana. The agreement will also bring more employment and other opportunities to Botswana.”
Kedikilwe said the agreement was only the first step – as much work needed to be done during the next several years to make the transformation a success.
De Beers, established in 1888, was the world’s leading rough diamond company and together with its joint venture partners, the miner operated in more than 20 countries across six continents.
Here is a summary of the new sales agreement:
- The agreement, which backdates to 1 January 2011, will see De Beers transfer its London-based rough diamond sales activity to Botswana.
- Diamond Trading Company (DTC) will, however, relocate its Sights and sales operations - including professionals, skills, equipment and technology - from London to Gaborone by the end of 2013.
- DTC will aggregate production from De Beers’ mines, and its joint venture operations worldwide, and sell to international Sightholders.
- Diamond Trading Company Botswana (DTCB) will continue to sort and value Debswana’s production before selling it on to DTC.
- Botswana government to have an independent sales outlet that will begin this year at 10 percent of Debswana’s run of mine production. This will rise to 15 percent over a five year period.
Mathew Nyaungwa, Rough&Polished
