
DE BEERS confirmed on Monday it had finalised talks on a rough diamond sales deal with the Botswana government and on extending mining licences for its joint venture there to 2054.
The 85%-owned Anglo American company told Reuters there would “be a signing” ceremony “in the next few weeks”.
“The government of Botswana will be hosting the signing,” Al Cook, CEO of De Beers told the newswire.
Debswana, a 50:50 joint venture between top diamond producer Botswana and De Beers, currently sells 75% of its output to De Beers, said Reuters.
In 2023, the two sides agreed to a 10-year deal under which the government’s share of production would gradually rise to 50%. However, the deal was never signed under the leadership of former Botswana President Mokgweetsi Masisi.
On January 23, new President Duma Boko, who swept to power last October, said he hoped to quickly finalise the agreement.
The conclusion of the negotiations is in alignment with those agreed in 2023, De Beers said in a statement. Negotiations on the matter began in 2018.
Boko has said talks aimed at increasing Botswana’s ownership stake in De Beers – currently at 15% – were “going well”.
Anglo American is seeking to divest De Beers as part of a broader restructuring plan aimed at refocusing its operations on copper and iron ore mining.
A public listing or sale to a sovereign wealth fund or other strategic investor are two possible options, said Reuters citing sources.
Yet the spin-off plan for the 137-year-old diamond producer comes at a time of depressed diamond prices.
Rough diamond prices have slumped by around 20% since early 2023, said Reuters citing the Zimnisky Global Rough Diamond Price Index, hurt by the rising popularity of lab grown diamonds and a shift by younger consumers away from diamonds.
But Cook told Reuters he was confident the deal with Botswana will help boost the firm’s marketing efforts.