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De Beers Group mentioned on Friday it has prolonged by six months a 10-year settlement with Botswana for the sale of tough diamonds from their collectively owned enterprise, giving each events extra time to barter a brand new contract.
The 2011 tough diamond gross sales settlement wherein the enterprise, Debswana, sells 75% of its output to Anglo American PLC subsidiary De Beers was set to run out in 2020, however was prolonged for a yr in December 2020 as a result of pandemic.
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The settlement will now run till the tip of June whereas contract negotiations proceed.
A deal is critical for Botswana because the Southern African nation will get about 30% of its revenues and 70% of its overseas change earnings from diamonds, which make up a fifth of its GDP. For De Beers, which is 15% owned by the federal government of Botswana, a contract renewal would offer one other lengthy interval of income certainty.
Each events have declined to reveal the precise phrases being negotiated however analysts have mentioned the federal government is prone to wish to improve its share of diamonds produced by Debswana from the 15% agreed in 2011, or to get a bigger share of larger stones. Final yr, the federal government’s share was raised to 25%.
Debswana sells the steadiness of its output to state-owned Okavango Diamond Firm (ODC), an impartial channel created by the federal government to promote diamonds.
Botswana has a long run plan of remodeling itself from simply being a producer of tough diamonds to taking a extra lively function within the broader business, taking part in actions equivalent to buying and selling, chopping and sharpening and different assist providers equivalent to tourism and hospitality, transport, diamond banking, gemmological features and laboratories.
President Mokgweetsi Masisi has mentioned he needs extra folks employed within the business because the nation battles with comparatively excessive unemployment, particularly amongst youths.
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