What they said about the deal
Mbongeni Mguni | Friday June 30, 2023 10:36
The future of the 54-year old partnership between Botswana and De Beers is set to be announced today with three options on the table; a new deal, a temporary extension to accommodate more talks or the declaration of a dispute.
Since 2019, the two parties have been negotiating the terms of a new agreement governing the sale of diamonds from Debswana, as well as the renewal of the company’s mining leases which expire in 2029. The journey to today’s deadline traverses declarations of undying loyalty, COVID-19, and rising tensions. It can be tracked through quotations from the principals involved in the talks in the past five years.
In May 2018, a month after taking office as the country’s fifth president, Mokgweetsi Masisi sat down for an interview with Bloomberg, where the then nascent issue of renewing government’s agreement with De Beers’ came up, inevitably.
“The whole value proposition of beneficiation of diamonds revolves around jobs, the diversification of the economy.
“Why take them far away? So the very things that cause them to be processed elsewhere, we want to get to the underlying reasons for that, the attractions and bring them to Gaborone.”
By November of that year, both sides had established teams and begun working on their heads of agreement. The analogy of “a marriage” was heavily used by both sides in announcing the start of their negotiations.
“I would rather view these negotiations as a renewal of vows and what will be renegotiated are the details of the ceremony and the invitation list,” said Masisi at the annual Diamond Conference.
“I can assure you that the agreement will be realised.”
He however added: “We need to move further up the pipeline to jewellery manufacturing and retail. “Participation at these upmarket levels of the pipeline, however small, will go a long way in promoting the development of Gaborone as a diamond city and Botswana as the number one diamond destination.”
For his part, then De Beers CEO and now co-chair, Bruce Cleaver, stuck to the marriage analogy.
“We couldn’t wish for a better partner as a company our relationship will be “around for another 50 years.”
Negotiations began in earnest in 2019 ahead of the agreement’s expiry in September 2020. The arrival of COVID-19 froze the negotiations and the deadline sailed past. Incidentally, it was later revealed that the agreement’s postponement meant that Okavango Diamond Company’s allocation from Debswana could rise to 25% from 15%.
The negotiations continued silently in the aftermath of the global carnage caused by the pandemic and it was not until January this year, that Mmegi was able to receive an update, courtesy of Minerals and Energy minister, Lefoko Moagi.
“We are all committed and we know what it means to our economy as Botswana and also to De Beers.
“We are all looking at June to say it must not pass without an agreement.
“There’s not much left but the one or two issues left are material.
“The challenge is just that they have to be negotiated as a package.
“Much of the issues we have already passed them, but we are left with these two issues that we have to finalise on.”
Two months later, in March 2023, the President made his now famous speech in Moshupa, where he gave the clearest sign that not all was well between the two parties.
“We are at the negotiating table now and because we have learnt some new things, we want more for the Botswana government and we are going to get more; the allocation of rough diamonds.
“This is because we want to do what we have learnt. We have learnt in outcome terms and this means we can make much, much more money than we have been making by selling rough.”
Also in March, while not directly responding to the President, Cleaver, now as De Beers’ co-chair, made remarks on the possibility of supply from Botswana being interrupted.
“We have mines all over the world, not just in Botswana.
“We are doing a big expansion in Venetia in South Africa and we have a big mine in Canada and mines in Namibia.
“We do have supply elsewhere, but the only way for me to answer that question is to say I’m very confident that we will come to a deal that is sensible for all parties and that all parties will be pleased with that.
“That’s what I’m focussed on and that’s what the team is focused on.”
Masisi made further remarks at a ruling party press conference in April and at the opening of a traditional leobo in May.
“If you look at the agreement that’s there, that agreement restricting you to rough diamonds, you have to determine that you will move out of that.
“That’s where we are. We are talking to each other, we are determined and I have issued an instruction that it cannot keep being the way it was.
“I refuse and I refuse on your behalf this agreement of slavery; we have to throw it away.
“Even if we are litigated against for it, we refuse because the truth is that the returns from these diamonds must be for Batswana.
“You cannot engage a shepherd for your cattle for his expertise and he says the cattle are his. He’s still a shepherd.”
Since then, both sides have preferred to maintain their silence on the talks, as the agreement has entered a ‘closed period’. Moagi however tell foreign journalists in Gaborone this week that the next developments would be announced today (Friday).
“I’m sure you all know that Friday is D-Day and I can only tell you that wait for Friday.
“Having said that, we are making headway and even as I’m a little bit late coming to this press conference, we are busy on these terms.
“We are working round the clock just to make sure we can conclude a deal or no deal, whatever can come on Friday.
“But I must assure you that we are very optimistic that we are all fully aware of what it means to Botswana, to De Beers and to the diamond industry and we believe we will gravitate to something that will be a shared win if not a win win for all of us.”