De Beers and Government of the Republic of Botswana sign milestone agreement

The Government of the Republic of Botswana and the De Beers Group have entered into an agreement, which is a new 10 year contract for the sorting, valuing and sales of Debswana’s diamond production. The agreement, which commences from 1 January 2011, is the longest sales contract ever agreed between the two partners and Nicky Oppenheimer, Chairman of De Beers refers to this as a once in a generation opportunity for Botswana and De Beers to shape the future of the diamond industry. The agreement entails:

- De Beers will transfer its London-based rough diamond sales activity to Botswana. The Diamond Trading Company (DTC) will relocate its Sights and sales operations - including professionals, skills, equipment and technology - from London to Gaborone by the end of 2013. From its new base in Botswana, the DTC will aggregate production from De Beers’ mines, and its joint venture operations worldwide, and sell to international Sightholders. This activity will underpin the long-term future of the partnership and transform Botswana into one of the world’s leading diamond trading and manufacturing hubs.

Diamond Trading Company Botswana (DTCB) will continue to sort and value Debswana’s production before selling it on to the DTC. The DTC will continue to support the domestic cutting and polishing industry in Botswana, and will make more diamonds available for manufacturing businesses operating in the country.

An independent sales outlet for the Botswana Government, which will begin this year at 10 percent of Debswana’s run of mine production and rise to 15 percent over a five year period.

The Minister of Minerals, Energy and Water Resources, Dr. Ponatshego Kedikilwe, hailed the agreement as a major step in securing the future of Botswana’s economy, saying, “This agreement, and the tangible outcomes it will deliver, will enable Botswana to achieve its aspiration to be a major diamond centre engaged in all aspects of the diamond business. The agreement gives us direct access to market, which will be helpful for the successful development of the downstream diamond industry in Botswana.”

Mr. Oppenheimersaid that, “With this agreement, De Beers cements its commitment to being the driving force behind Botswana’s emergence as a world-leading diamond trading and manufacturing centre. The transformation that this agreement sets out is testament to our belief in the future of Botswana, and is a clear acknowledgment that De Beers’ success is only possible with a profound understanding that the aspirations of our partners must be at the core of our business.” He also added that, “We look forward to working with our partners to provide our Sightholders with the continuity and quality of supply they expect while pushing beneficiation to greater levels than ever seen before.”