De Beers Concedes to Botswana’s Demands further Diluting its Global Gem Market Dominance

The world’s largest diamond company, De Beers has struck a last-minute deal with the government of Botswana to hand over a larger share of diamonds produced in the country, further loosening the country’s chokehold on the global gem market. The agreement, which concluded just as the deadline for a deal expired, holds huge implications for Botswana’s diamond-dependent economy and the global diamond supply chain. President Mokgweetsi Masisi of Botswana has persistently criticised the longstanding agreement, demanding greater benefits for his country, including a larger allocation of the locally produced gems. Under the new terms, Botswana’s state-owned diamond trader will now receive 30% of the output from Debswana, the De Beers unit responsible for approximately two-thirds of the company’s annual production. Moreover, the government disclosed that there is a tentative agreement to potentially increase its share to as high as 50% in the future. While De Beers breathed a sigh of relief over the signing of a new decade-long agreement, its concession weakens its market dominance as a larger portion of diamonds will now be sold through a third party.

AFRICAN BUSINESS