Gahcho Kué diamond mine earnings fall in ‘disappointing’ market for De Beers JV
Operations at the mine in the Northwest Territories lost C$11 million compared to an income of C$2.7 million in last year’s third quarter.
De Beers is confident of maintaining its long-standing partnership with Botswana, a company official told Reuters on Thursday, but said some of the negotiations to agree new terms were complex.
Botswana President Mokgweetsi Masisi on Sunday threatened to walk away from talks on the extension of De Beers’ mining rights in the country unless it got a larger share of revenues.
De Beers’ Vice President-Corporate Affairs (Global Sightholder Sales) Otsile Mabeo told Reuters by email the company was “confident that our successful partnership will continue” and said that “the arrangement must make economic and strategic sense for both parties”.
Anglo American Plc’s De Beers is in talks with the Botswana government to extend mining rights that expire in 2029, as well as a 2011 diamond sales agreement that expires in June this year.
“It’s important to note that our negotiations span more than just the sales agreement, they also include the future mining rights for Debswana, which are more complex and require more time to land on the finer details,” Mabeo said.
Under the current deal, Debswana – a 54 year-old joint venture between De Beers and the Botswana government – sells 75% of its output to De Beers, while 25% goes to the state-owned Okavango Diamond Company. Botswana supplies 70% of De Beers’ rough diamonds.
Last year, Debswana’s diamond sales hit a record $4.588 billion, compared to $3.466 billion in 2021. Diamond sales, almost entirely from Debswana, account for two-thirds of Botswana’s foreign currency receipts and a fifth of its gross domestic product.
Botswana government officials were not immediately available to comment, but Lefoko Moagi, Botswana’s mines minister, told Reuters earlier this month he hoped a deal would be reached before the June deadline.
“A lot has been done, and what is left is material, but it is not insurmountable, it is in our best interests that we resolve that by the deadline,” Moagi said on the sidelines of last week’s Cape Town indaba mining conference.
(By Brian Benza; Editing by Nelson Banya and Barbara Lewis)
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