BOTSWANA would be prepared to walk away from negotiations with De Beers regarding the renewal of a diamond sales agreement, said Bloomberg News.
Citing comments made by Botswana president Mokgweetsi Masisi, the newswire said the negotiations were like “shaking a giant”.
“These are our diamonds, and we want a larger share for us, but through negotiations,” Masisi said. “If it gets difficult and talks fail, we will have to say, ‘Let’s go our separate ways.'”
The negotiations have been underway since 2018. The current agreement expired in September 2020 but has been extended several times, initially amid the Covid pandemic. Last year, the sides agreed to keep the deal going until June.
The Botswana government has a 50% stake in Debswana with De Beers controlling the other half. Debswana mines about 95% of Botswana’s total diamond production.
Bloomberg News said that the pact was one of the industry’s “most valuable covenants”, and the delays were “unnerving an ecosystem that includes contractors, sightholders, factories, retailers and financiers”.
“Anything that would trouble diamonds would make the market jittery,” Minerals and Energy Minister Lefoko Moagi told Bloomberg on the sidelines of a January 25 briefing. “Markets can start asking, ‘What’s happening here?'”
Lucara Diamonds, which operates Botswana’s Karowe diamond mine, said in November it was hopeful the negotiations between the government and De Beers would “conclude in the short term”.
“We would like to see a long term relationship,” said Lucara CEO Eira Thomas who also described the negotiations as “hugely distracting”.
Commenting on negotiations, Moagi told Bloomberg News in January that most of its terms had been agreed upon, but “two material issues” remained. “The challenge is just that they have to be negotiated as a package,” he said.