Talks with Botswana on new diamond deal held “in good spirits” says Wanblad

Duncan Wanblad, CEO, Anglo American

ANGLO American CEO, Duncan Wanblad said negotiations over a new diamond marketing agreement between its 85%-owned De Beers and Botswana had been held “in good spirits both side of the fence”.

Responding to questions at Anglo American’s full year results presentation today, Wanblad said: “The vast majority of all the elements of the negotiation have been completed. There is only one outstanding workstream and that is where the team is working at the moment”.

The current agreement, which permits joint venture company Debswana to sell 75% of Botswana diamond production to De Beers, expired in 2020. The agreement has been extended, initially during the Covid pandemic. Last year, the sides agreed to keep the deal going until June.

Debswana is owned equally between De Beers and the Government of Botswana.

However, Botswana president Mokgweetsi Masisi was quoted by Bloomberg News as saying earlier this month that discussions were like “shaking a giant”.

“These are our diamonds, and we want a larger share for us, but through negotiations”. He added: “If it gets difficult and talks fail, we will have a say, ‘Let’s go our different ways'”.

Sarah Kuijlaars, De Beers CFO said Mokgweetsi’s did not represent the discussions with De Beers. “I think we’ve got to acknowledge that the President was talking to the community,” she said.

“It’s worth balancing that out in that Bruce [Cleaver, co-chairman of De Beers] and Al Cook [De Beers CEO] have been working with President last year, and in one-to-one conversations it has been very constructive.

“The President acknowleged the value we have brought to the (Botswana) economy over the last 50 years,” she said.

De Beers was a standout contributor to Anglo’s full year earnings. Based on underlying Ebitda of $1.41bn for the 12 months ended December 31, De Beers comprised 9.7% of Anglo’s total Ebitda of $14.5bn. In 2021, De Beers comprised 5.3% of Ebitda.

Kuijlaars said that while it was “super early days” the indications were that “the market will continue to be resilient. “We are cautiously optimistic.”

De Beers reported reduced diamond sales for the first cycle of its 2023 financial year. Provisional sales totalled $450m compared to $660m for the first cycle in 2022. Sales in the last cycle of the year totalled $417m.