Botswana has reached its lightbulb moment. It wants more of its diamond wealth. Botswana is the largest diamond producer in Africa and the second largest producer in the world after Russia. It is home to the Jwaneng Mine, the world’s richest diamond field by value, producing high-quality diamonds at an annual average of over 12 million carats.
In 1969, the country signed an agreement with De Beers that eventually led to the establishment of Debswana. The country is exploring its diamond wealth through Debswana. De Beers is a mining consortium and subsidiary of London-based Anglo American Plc.
Both Botswana and De Beers have an equal 50% stake in the company, a deal that would later allow the country to leverage its rich mineral wealth. In fact, Botswana holds a 15% stake in De Beers, while Anglo American Plc retains the remaining 85%. The South African country supplies 70% of De Beers’ rough diamonds, and De Beers controls all four of Botswana’s mines.
Under the current contract, Debswana sells 75% or three-quarters of its rough diamond production to De Beers, with the remaining 25% going to the state-owned Okavango Diamond Company (ODC), through which the government independently sells rough diamonds to the public. market. Last year, De Beers sold $4.3 billion in rough diamonds, up 13% from sales in 2021. And ODC sales rose to $1.2 billion, up from $963 million in 2021 .
It took the country a long time to fully explore selling its gems directly to customers outside the De Beers system. It has now realized how much it could earn from the sale of its diamond and is demanding an increase in its diamond sales share as both sides are in talks to extend the sales license. While the country has not specified how many additional shares it wants in the existing agreement, De Beer is willing to negotiate as the government has threatened to end the more than five-decade-old relationship.
“Apart from the fact that the diamonds are ours, there is no point in continuing to relegate us to participation in the rough space,” said President Mokgweetsi Masisi. “So it is only logical that we want more and that we are going to get more. But by negotiating.”
In 2018, the production of natural gemstones and industrial diamonds in Botswana was 24.5 million carats. Last year, production increased 11% to 5.8 million carats, driven by strong factory performance, particularly in the world’s richest diamond mine, the Jwaneng mine. Debswana’s rough diamond sales increased 54% in the first six months of 2022. At the end of 2022, the joint venture’s diamond sales totaled $4.588 billion, compared to $3.466 billion in 2021.
The outlook for diamonds was discovered in 1938 in Bechuanaland (the official name of Botswana during the British colonial administration which ended in 1965), after exploration by a joint venture between Anglo American Plc and De Beers which started in 1932. Diamonds were later discovered in commercial quantities in 1967, by the De Beers Group. De Beers is a diamond mining, diamond exploitation, diamond retail, diamond trading and industrial diamond production company owned by the British multinational Anglo American plc.