Botswana deal with HB Antwerp could challenge partnership with De Beers

A DIAMOND sales agreement between Botswana and HB Antwerp could challenge the southern African nation’s 50-year partnership with De Beers, said Bloomberg News in a report on Monday.

The deal, in which Botswana is to buy a 24% stake in the Belgian gem trader, will see Botswana’s Okavango Diamond Company received polished rather than rough prices over a five-year supply deal for some of its sales.

This could potentially result in higher revenues for Botswana than past contracts with De Beers which bought rough diamonds.

“Today is the dawn of a new era in the diamond story of Botswana as we begin this journey with HB Antwerp,” said Botswana’s President Mokgweetsi Masisi. “This partnership has the potential to be a game changer.”

De Beers and Botswana jointly own Debswana, which mines almost all of the diamonds in the country, the world’s largest producer by value.

Okavango is entitled to 25% of Debswana’s output. The venture’s revenue was $4.6bn in 2022 and Debswana has long-term plans to extend the lives of some of its mines at a cost of billions of dollars, said Bloomberg News.

No value was given for purchase of the stake in HB Antwerp, it said.

Botswana and De Beers have been negotiating a new agreement for about two years. De Beers said earlier this year most of the new deal had been settled.

“Our business model enables us to capture optimal value for us and our partners in both buoyant and more challenging industry conditions,” De Beers said in a response to queries. “We are confident that we and government will finalize an agreement that deepens our relationship.”

In addition to the Debswana Sales Agreement the talks with the government also cover the future mining rights for Debswana, De Beers said. “We are set up to operate successfully at scale,” the company added.