Is Botswana Getting A Raw Deal From De Beers Diamonds - The World News -

[ Mining in Botswana ] ──> [ Aggregation/Rough Sale ] ──> [ Cutting & Polishing ] ──> [ Retail Jewelry ] (High Volume / Taxed) (De Beers Controlled) (Low Local Margin) (Massive Margins)

The vast majority of cutting, polishing, and jewelry manufacturing historically took place overseas. Botswana missed out on the lucrative downstream stages of the supply chain that create the most jobs and economic value.

If De Beers accedes to Botswana’s demands for more local processing and greater supply control, the "partnership" will finally evolve into equality. If they resist, Botswana may well decide that the "raw deal" is no longer a deal at all.

Is Botswana Getting a Raw Deal From De Beers Diamonds? The decades-long marriage between the Republic of Botswana and De Beers Group is often hailed as the world’s most successful public-private partnership. Since the discovery of diamonds at Orapa in 1967, shortly after Botswana gained independence, this alliance has transformed a destitute pastoral nation into a thriving upper-middle-income economy. [ Mining in Botswana ] ──> [ Aggregation/Rough

Is Botswana getting a raw deal? Historically, the answer is nuanced. Compared to other resource-rich nations in Africa that fell victim to the "resource curse," Botswana maximized its diamond wealth to build infrastructure, provide universal healthcare, and fund free education. In that regard, the De Beers partnership was an undisputed triumph of resource nationalism and fiscal management.

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At the heart of this success story is Debswana, a 50/50 joint venture between the Government of the Republic of Botswana and De Beers. For years, the operational model was straightforward: Debswana mined the stones, and they were funneled into De Beers’ global sightholder system, largely processed in London. If they resist, Botswana may well decide that

According to a 2023 report, under the expiring agreement, De Beers purchased 75% of Debswana’s output, leaving Botswana’s state-owned Okavango Diamond Company (ODC) with just 25% to sell independently. This meant De Beers controlled the flow, the pricing, and the strategic stockpiling of diamonds. As one analyst noted, the previous arrangement allowed De Beers to "park African diamonds firmly under the control of mismanaging multinationals".

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In 2019, the government of Botswana announced plans to increase its share of the revenue from diamond mining. The government proposed a new royalty rate of 15% on the value of diamonds extracted from the mines, and also announced plans to acquire a 24% stake in the Debswana Mining Company, which is the joint venture between De Beers and the government of Botswana. Since the discovery of diamonds at Orapa in

For decades, the partnership between the Government of Botswana and De Beers was often cited as a model public-private partnership. However, critics argued that the corporate giant held the upper hand by controlling the sorting, pricing, and marketing of the gems.

As parent company Anglo American moves forward with its of De Beers, Botswana’s aggressive maneuvers demonstrate that the country is firmly in the driver’s seat of its financial destiny. The Evolution of the Deal: From 10% to Equity

What do you think? Should resource-rich nations control their own diamond destiny? Join the conversation in the comments below.