De Beers considering a large investment in Botswana - report

A significant De Beers investment in two of its flagship mines is contingent on ongoing negotiations with the Botswana government, according to group co-chairperson Bruce Cleaver.
While the current 25-year mining licences that govern Debswana's operations — the mining partnership between De Beers and the government — expire in 2029, the parties decided to move the discussions forwards because they need to make decisions about expansion projects at the Jwaneng and Orapa mines.
“We could have left it until 2029… but we and our partners felt it was responsible to renew it now,” Cleaver said in an interview on the Rapaport Diamond Podcast.
“You need to start making investments now, so we don’t want to spend that money when the license is about to expire, with no certainty that it will be renewed… and nor does the Botswana government, because we all want the same thing, which is for production to continue at Debswana.”
He said the urgency stems from the fact that expansion projects at Jwaneng and Orapa will only pay off or produce diamonds after the licence expires.
Debswana, for example, is currently mining "cut-8" of the operation at Jwaneng, which is considered one of the most profitable mines in the world, while work is being done to clear the ore body for "cut-9," which will only begin yielding diamonds in 2029.
With open-pit mining set to end in 2032, the parties must decide quickly whether to go underground at that point.
“These are big, long complex projects,” Cleaver said. “This can take 10 years between the time you agree to start doing it and when you see your first ore.”
He cites De Beers' Venetia mine in South Africa, where excavation work for the extension began in 2013 and the first production is expected this year.
De Beers made a $2 billion investment in the Venetia expansion.
The Botswana government and De Beers are currently negotiating mining licences at the same time they are negotiating a new marketing and sales agreement.
The marketing agreement has already been postponed three times, amid speculation that the government is looking to change the structure of its partnership to generate more revenue.
Through the parastatal Okavango Diamond Company, the government currently receives 25% of Debswana goods for independent sales. 
President Mokgweetsi Masisi was quoted as saying that the government wants a larger share of local output and that it is prepared to leave the talks if its demands are not met.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished