The Botswana government and De Beers Group have moved one step closer to a final sales and lease agreement.
The two sides just signed a “head of terms” for their 10-year deal on how Debswana sells its rough diamond production through 2033 and for the anticipated 25-year extension of Debswana’s mining licenses, which will run through 2054.
Debswana is a 50-50 joint venture between De Beers and Botswana.
De Beers spokesperson David Johnson says this does not mean a deal has been finalized, but it’s a milestone along the way. He declined to give a deadline for when the completed agreement will be signed.
After years of sometimes heated negotiations, Botswana and De Beers forged an “agreement in principle” on June 30. For the time being, they are still working under the contract they signed in 2011.
The June agreement in principle called for state-owned Okavango Diamond Company (ODC) to sell 30% of Debswana’s production—up from the current 25%—with that eventually growing to 50%.
The head of terms provides further detail and clarity on the commercial and operational aspects of the agreement, including the Diamonds for Development Fund, the apportionment of Debswana supply, talent development, beneficiation, and value chain development, said a statement from the two parties. However, those specifics aren’t being made public for now, Johnson says.
“This is an important step forward as we progress towards finalization of the contracts and implementation of the transformational new agreements,” said Botswana’s minister of minerals and energy Lefoko Maxwell Moagi in the statement.
Top: De Beers CEO Al Cook and Botswana’s minister of mines and energy, Lefoko Moagi, at the June signing ceremony (photo courtesy of De Beers)
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