Members of Botswana’s ruling Botswana Democratic Party (BDP) applauded a position taken by government that will witness the renegotiation of a diamond mining deal with industry giants De Beers.
The southern African nation earns approximately $4.5 billion per year in sales, taxes and royalties from the joint venture that is set to expire in June.
President Mokgweetsi Masisi said his nation receives a 25 % stake from their agreement which will change after renegotiation.
“We used to receive 10% of the stake, but now, under my leadership, we are receiving 25%,” said Masisi.
The southern African leader said he is willing to pull out of the long-standing agreement with the diamond giants if renegotiations fail.
“This is our company, we want a majority stake, and we are doing so through negotiations,” he said, adding, “if talks become difficult, we will say, no, let everyone pack and go separate ways.”
Hans Merket, a Belgian-based researcher on diamond mining, said De Beers is profusely benefitting from its current deal with Botswana.
“In the current arrangement with De Beers, Botswana fears it is missing out on the profits from its diamonds, because it has no idea of or control over how much value the country’s rough production generates further down the supply chain after it is cut and polished,” said Merket.
The mining expert also said President Masisi admires the supply arrangement between private diamond miner Lucara, which operates a mine in his nation, and Belgian-based buyer, HB Antwerp.
“The business model between HB Antwerp and Lucara closes this gap through a vertically integrated supply chain that generates that allows all parties, including the government, to share in the profit from the final polished products.”