Sunday Times E-Edition

De Beers optimistic on Botswana deal


● De Beers, one of the largest diamond producers in the world, is confident talks with the Botswana government on renewing its extraction partnership will lead to a beneficial deal for all parties.

Speaking on the sidelines of the opening of De Beers’ new rough-diamond sorting, sales and valuation facility at Sky Park Industrial in Kempton Park, CEO Al Cook said he was optimistic a deal would benefit the company, government and people of Botswana.

“Right now, we are listening carefully to what they are asking for and saying, ‘how can we come together to create an agreement that works for the government of Botswana, that works for the people of Botswana, and that works for De Beers’.

“I am confident we are going to get to an agreement that not only looks good in 2023 but stands the test of time,” Cook said.

De Beers and the Botswana government jointly own Debswana, a diamondmining company established 55 years ago. They are in talks to renew a 2011 marketing and sales agreement for the production of rough diamonds from Botswana through Debswana, which grants De Beers 75% of production.

The agreement came under fire in February from Botswana President Mokgweetsi Masisi, who threatened to walk away from the talks if Botswana did not get a bigger share of Debswana’s output by marketing outside the De Beers system, according to Reuters.

Cook on Friday confirmed the parties are negotiating their sales and mining agreements at Debswana.

“It is really important for both sides that we have agreements that stand the test of time, that when we look back 10 years from now, both sides — the government and De Beers — can say we created an agreement, we worked together in 2023 to do things that stood the test of time.

“So, I have huge respect for what the government is asking for. They are asking for agreements that will benefit the people of Botswana over the years and decades to come, even beyond diamonds. The reason I have huge respect is that it is not only for the people of Botswana and for the government of Botswana, but also good and really important for De Beers as well,” he said.

Debswana, which is one of the major contributors to Botswana’s foreign exchange earnings, operates Jwaneng, the world’s richest diamond mine by value, as well as the Orapa, Letlhakane and Damtshaa mines.

De Beers on Friday unveiled its new sightholder sales facility in Kempton Park, which has been relocated from Kimberley where it had operated since 1974.

The move is in line with the South African government’s drive to have the country’s mineral beneficiation sector at the Gauteng Industrial Development Zone, near OR Tambo International Airport.

Cook said the beneficiation of diamonds was vital, not just in South Africa but also in Botswana, Namibia and Canada, where De Beers is invested.

“Wherever we invest we need to ensure that countries and communities don’t just benefit from the recovery of the rough diamonds but benefit from the cutting, polishing and, ultimately, the manufacturing of jewellery.”

Cook said diamond markets care about the origins of the precious stones.

“If I buy a piece of jewellery, I want to know the story of that jewellery. Not just the story of the diamond, but the story of the jewellery itself. If we can say this is a ring that [contains] a diamond and gold recovered in South Africa, was put together, cut and polished in South Africa, and made into a beautiful piece of jewellery in South Africa, that has authenticity that will command a value premium and get people really excited about what they wear in their special moments.”

Also speaking at the event, mineral resources & energy minister Gwede Mantashe said De Beers must remain in the Northern Cape.

“You have left too many holes in the Northern Cape. You cannot just leave all those holes and then disappear; something must happen, and they made some commitments. It cannot happen that you [just] leave the Northern Cape, it cannot be,” he said.

“De Beers was in Kimberley, De Beers was in Kleinsee, De Beers was in Jagersfontein, De Beers was in Koffiefontein, De Beers was in Finsch Mine and De Beers was in the Northern Cape. It cannot happen that you [just] leave.”

Cook said De Beers was committed to the exploration of new diamond projects in South Africa beyond the company’s R35bn investment in the Venetia underground mine in Limpopo to extend its life beyond 2040.

“People look at the long history of diamond mining in South Africa and sometimes do not appreciate the potential we still have to explore for diamonds, and we in De Beers have committed to continue with that exploration,” he added.

“That, to me, is the answer to the challenge of what we can do beyond what we have at the moment, and where else we can invest. The key to that is where else we can explore for diamonds.

“We understand the expectations that South Africa has of De Beers, given the history and the size of our business. We are proud of the investments we are making at the moment.

“Here we are at Sky Park today with our office here, our business here and our facility here ... all of that is dependent on the diamonds we produce in South Africa.”

I have huge respect for what the government is asking for

Al Cook

De Beers Group CEO

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