Botswana's new president, Duma Boko, has expressed his hope to finalize a contract with De Beers soon, while indicating that negotiations for the long-delayed deal may have stalled.
"As things stand, [De Beers is] considering walking away and not signing at all," Boko stated during a press conference after his swearing-in on November 1. "That is a very dangerous position for the country."
In June 2023, De Beers and Botswana had reached an agreement in principle for a new 10-year deal, followed by a "head of terms" in October. However, a final contract has yet to be signed.
"We will reach out as quickly as possible to engage with our partners and ensure that an agreement is signed," Boko said, adding that tensions surrounding the negotiations may have complicated the process.
"We need to moderate, always mediate, our representations with civility and respect, especially in a commercial setting that is under local, regional, and international scrutiny," said Boko. "Certain pronouncements create uncertainty and unease among investors, which can lead to a cascade of negative outcomes, some of which we are experiencing now."
Boko emphasized the importance of a balanced negotiation, noting that each party must make compromises to reach an agreement. "A proper negotiation involves compromise, where you get a bit of what you wanted, and the other party gets a bit of theirs. Both sides win some, and both lose some, resulting in a sustainable, durable agreement. These are basic principles of negotiation, and we will proceed in this way."
He also acknowledged Botswana's dependence on diamond revenue. "We want to safeguard the goose that lays the golden egg for us in the short to medium term, while we also look at ways to diversify the economy," Boko said.
"We compete in a global setting, and a shift toward Angola as the center of the diamond industry could be economically devastating if not addressed. We need to create an environment that fosters investor satisfaction and confidence," he added.
Analyst Paul Zimnisky suggested that De Beers may feel it is being asked to make too many concessions, especially given its current business challenges. "It appears there is a line that De Beers is holding," Zimnisky noted. "An imbalance in the agreement could harm the long-term viability of the De Beers-Botswana joint venture. However, a strong De Beers is likely beneficial for Botswana as well, and it seems the president recognizes this, which is encouraging."
Botswana and De Beers are equal partners in Debswana, the company's primary mining operation, and Botswana also owns a 15% stake in De Beers, which majority owner Anglo American has put up for sale.
Boko did not mention the previous president Mokgweetsi Masisi's plan for Botswana to acquire a 49.9% stake in diamond manufacturer HB Antwerp, an increase from the initially intended 24% stake.
HB Antwerp cofounder Rafael Papismedov mentioned his expectation to meet with the new administration soon. "We will engage in discussions. Botswana is a democracy, and the transition of power was friendly. We look forward to meeting with them," Papismedov said.
"Our business model, our technology, and the higher wages we offer were appealing to the previous administration, and I believe it will be appealing to the new one as well," he added.