Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Botswana and De Beers Plc are working out the “finer” details of a new diamond-sales pact and the southern African nation’s government is confident a deal will be struck, President Mokgweetsi Masisi said.
An initial 10-year agreement governing terms for the sale of diamonds produced by Debswana Diamond Co. — a joint venture between the two — and auctioned through the De Beers system lapsed in December 2020 and was extended to June 2022 due to the disruption from the pandemic. The two agreed last month to extend negotiations on new terms to June 2023.
“We are just fine tuning, but we will strike a deal,” Masisi said in an interview in Marrakech, Morocco. “It is imperative that a deal gets struck because it is in the interests of both parties.”
Botswana’s mines contribute about two-thirds of De Beers’ annual rough-diamond production. Botswana now wants to leverage its control of the diamond reserves to wring more concessions from one of the world’s top diamond suppliers.
That doesn’t mean the government wants to break ties with De Beers, Masisi said. The government is seeking adjustments in the terms of the joint venture, and more value added to the stones in Botswana through local processing to help boost job-creation and economic growth, he said.
“It’s really value addition, so the resources you have been mining, we want to use our knowledge base to yield greater returns,” Masisi said. “That’s the conversation De Beers and ourselves are talking about.”
(By Jennifer Zabasajja and Felix Njini, with assistance from Amogelang Mbatha and Mbongeni Mguni)
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