eBusiness Weekly
Botswana will acquire a 24 percent stake in Belgian gem trader HB Antwerp, in a deal that could challenge the southern African nation’s 50-year partnership with De Beers.
As part of the agreement announced by President Mokgweetsi Masisi on Monday, Botswana’s state gem trader Okavango Diamond Co. will receive polished rather than rough prices over a five-year supply deal with HB Antwerp for some of its sales. The new approach could potentially generate more revenue for the government than De Beers traditional method of selling rough — uncut and unpolished — stones.
De Beers and Botswana jointly own Debswana, which mines almost all of the diamonds in the country, the world’s No. 1 producer by value. In February, Masisi told a rally of his supporters that Botswana wants a larger share of revenue from the venture with De Beers: it currently gets 80 percent of the sales total when taxes and other charges are included. Masisi has previously threatened to walk away from talks with the biggest diamond company, which is a unit of Anglo American Plc.
“Today is the dawn of a new era in the diamond story of Botswana as we begin this journey with HB Antwerp,” Masisi said at the Belgian company’s offices in Botswana’s capital, Gaborone.
“This partnership has the potential to be a game changer.”
HB Antwerp already has a partnership with Lucara Diamond Corp., under which it pays polished prices for bigger stones from the company’s Karowe mine in Botswana.
Okavango is entitled to 25 percent of Debswana’s output. The venture’s revenue was US$4,6 billion in 2022 and Debswana has long-term plans to extend the lives of some of its mines at a cost of billions of dollars.
No value was given for purchase of the stake in HB Antwerp.
De Beers and Anglo American didn’t immediately respond to a request for comment. In addition to higher prices, HB Antwerp says its methods allow the origins of individual diamonds to be traced.
That could encourage consumers to pay a premium as Botswana is politically stable and its gems are extracted largely using mechanised methods. Diamonds in other parts of the world are often mined in dangerous conditions by small-scale miners and, in some cases, sales proceeds have been used to finance conflict.
Vladimir Putin’s invasion of Ukraine could prove a boon for Botswanan diamonds as Russia is the country’s biggest rival, according to Masisi. – Bloomberg.
