The government of Botswana and De Beers have reached an agreement in principle on a new 10-year sales agreement for Debswana's rough diamond production through 2033 and a 25-year extension of mining licences through 2054.
De Beers said the new agreement expands Botswana's footprint and leadership position across the diamond value chain, including a transition to increasing the share of Debswana's supply sold via Okavango Diamond Company (ODC) to 50% by the final year of the contract.
ODC will receive 30% of Debswana's production at the start of the new contract period.
De Beers also announced the creation of a multi-billion Pula Diamonds for Development Fund, with an upfront investment of BWP1 billion ($75 million) and further contributions over the next 10 years that could total up to BWP 10 billion ($750 million).
"For De Beers, it is a privilege to renew our half-century partnership with the people of Botswana. It is a partnership that is highly regarded around the world for the enduring role it has played in creating economic development and growth," said De Beers chief executive Al Cook.
"Our transformative agreement reflects the aspirations of the country, secures the future of our Debswana joint venture, and reaffirms De Beers' leadership position for the long term.
"The agreement represents our commitment to deliver investments in Botswana's diamond production, Botswana's diamond value chain, Botswana's knowledge-based economy, and, above all, the people of Botswana."
De Beers said as the partners progress and implement the formal sales and mining agreements, the terms of the most recent sales agreement, which expired on June 30, will remain in place.
This deal saw De Beers move the Diamond Trading Company (DTC) to Gaborone from London.
Botswana's President Mokgweetsi Masisi said earlier this year that his government wanted a larger share of local output and that it was prepared to leave the talks if its demands were not met.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
