Botswana and De Beers Sign Deal to Continue Rich Diamond Partnership

A Botswana government official and the chief executive of De Beers, the international diamond conglomerate, signed interim agreements on Saturday to continue a lucrative, decades-long diamond mining partnership that had appeared to be breaking down in recent months.

Only minutes before a midnight deadline on Friday, the parties announced that after years of negotiations, they had agreed in principle on a deal to renew a partnership that supplies De Beers with most of its diamonds and Botswana’s government with the largest chunk of its revenue.

The details of the deal were still being worked out, officials with the government and De Beers said. But it addresses one of the most significant gripes of the Botswana government, regarding the share of diamonds it receives in its joint mining venture with De Beers. Under the old agreement, Botswana received 25 percent of the rough stones extracted, while De Beers took the rest. Now, Botswana will immediately get a 30 percent share, and that will rise to 50 percent within a decade, De Beers and government officials said.

De Beers said in a statement that it had agreed to invest as much as $825 million over the next 10 years to help develop the Botswana economy. The agreement also includes establishing an academy in Botswana that will train locals in skills in the diamond trade, government officials said.

The government of Botswana, the world’s second largest diamond producer, hailed the agreements as a sweeping victory for the country of 2.4 million people, saying they would allow the southern African nation to achieve its long-term development goals.

“I must say with excitement that these are transformational agreements,” Lefoko Fox Moagi, the minister of minerals and energy, said on Saturday as he sat next to De Beers’s chief executive, Al Cook, to sign the deals. “These are talking to the aspirations of the people of Botswana.”

This year, Botswana’s president, Mokgweetsi Masisi, caused a stir when he made the unusual move of publicly criticizing the deal with De Beers, saying that his country was essentially being cheated.

“We must refuse to be enslaved,” he said in May at a community meeting in a rural village.

Mr. Masisi and other government officials demanded that Botswana receive more than 25 percent of the rough stones, and that De Beers make some investment in helping to expand other areas of the diamond industry in Botswana, including cutting and polishing, jewelry making and retail sales.

In challenging De Beers to give them more, Botswana officials were pressing a broader demand of African countries to get more from the natural resources that belong to them. There is a long history of countries on the continent losing out on their resource wealth to theft, corruption and mismanagement.

Mr. Cook said that Botswana government officials had been clear on the need for De Beers to invest beyond diamonds and in the knowledge-based economy, and to develop the diamond value chain and put the people of the country first.

“I believe that the deal that we have agreed does all of that,” Mr. Cook said during the signing ceremony.

The government said that the sales agreement, which deals with how the diamonds are allocated, had been extended to 2033. Separately, De Beers’s mining license was extended to 2054, giving the company some assurance that it would have a long-term future in the country.

Despite the government’s demands for a fairer deal, few would dispute that diamonds have already transformed Botswana in ways that many African nations can only envy.

In 1966, the year that De Beers first discovered diamonds in Botswana and that the country gained independence from Britain, Botswana was among the poorest countries in the world, with only about seven and a half miles of paved roads. Now, it is considered an upper-middle-income country, with robust infrastructure and the sixth highest economic output per person in Africa, according to the World Bank. The partnership with De Beers produced about $2.8 billion in revenue for Botswana last year.

But the World Bank also ranks Botswana as one of the most unequal countries on the planet, and Botswana citizens and government officials have said that they deserve to earn more from the diamonds that are buried in their soil in order to address the lingering social ills.

Yvonne Mooka contributed reporting from Mahalapye, Botswana.