+------------------------------------+-------------------------------------------+ | Metric | The New Deal | +------------------------------------+-------------------------------------------+ | Contract Duration | 10-Year Sales / 25-Year Mining Licence | | Government Output Allocation (ODC) | 30% initially, scaling up to 50% by 2035 | | Development Funding Injection | Up to $750 million over 10 years | | Key Economic Focus | Job creation, local beneficiation, tech | +------------------------------------+-------------------------------------------+ The Evolution of a Fifty-Year Monopoly
Critics argue Botswana has already been getting a raw deal for 50 years. They point to the "Sightholder" system—an opaque, invitation-only club where a select few buyers purchase rough diamonds at De Beers-set prices.
However, in recent years, a simmering tension has breached the surface. Accusations that Botswana is getting a "raw deal" have shifted from radical political rhetoric to mainstream government policy. As global diamond markets face unprecedented shifts, the geopolitical and economic struggle over Botswana’s subterranean wealth has reached a critical turning point. The Bedrock of the Partnership: Debswana
The deeper Botswana digs into its mines, the more expensive operations become. The upcoming Jwaneng Underground expansion project requires billions of dollars in capital expenditure to transition from open-pit to underground mining. As a 50/50 partner, Botswana must foot half the bill. If the government squeezes De Beers' margins too tightly, it risks disincentivizing the massive corporate investments required to keep the mines viable for the next generation. The Verdict: A Structural Shift, Not a Raw Deal So, is Botswana getting a raw deal from De Beers? Accusations that Botswana is getting a "raw deal"
The latest chapter in this partnership began with intense negotiations over a new sales agreement. The previous 10-year contract, signed in 2011, was extended multiple times due to the COVID-19 pandemic and complex discussions.
For nearly six decades, the relationship between the Republic of Botswana and the De Beers diamond conglomerate has been heralded as the "Golden Standard" of resource partnership. It is a narrative taught in business schools worldwide: a tiny, post-colonial African nation, emerging from the dirt of poverty in 1966, discovers the world’s richest diamond pipes and strikes a deal with a monopoly giant. The result? Botswana transformed into an upper-middle-income country with free education, low corruption, and a stable currency.
Transfer pricing—where goods are sold between entities of the same company—could be stripping the country of tax revenue. to create a parallel
Currently, diamonds from Botswana are often mixed with stones from South Africa, Canada, and Namibia before being sold. Botswana wants the right to sell its own stones independently—specifically through the state-owned Okavango Diamond Company (ODC) . De Beers is resisting, arguing that aggregation allows for better pricing consistency.
The partnership was forged in the late 1960s by Botswana’s founding President, Sir Seretse Khama, and De Beers chairman Harry Oppenheimer. At the time, Botswana was dirt-poor, and De Beers was the absolute monarch of global diamonds. Khama offered a deal: De Beers could mine, but Botswana would get 50% of the profits.
While the new agreement is a political and economic triumph for President Masisi, it introduces significant vulnerabilities that critics argue could backfire, turning a hard-won victory into a logistical raw deal. The Challenge of Selling 50% of Output At the time
[ Mining in Botswana ] ──> [ Aggregation/Rough Sale ] ──> [ Cutting & Polishing ] ──> [ Retail Jewelry ] (High Volume / Taxed) (De Beers Controlled) (Low Local Margin) (Massive Margins)
To truly maximize its wealth, Botswana is actively pursuing strategic diversification within the diamond sector and beyond. For example, the government has explored partnerships with independent diamond traders and cutters outside of the De Beers ecosystem, such as its deal with Belgian firm HB Antwerp, to create a parallel, fully transparent supply chain.
— The World News
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The central argument for Botswana getting a "raw deal" revolves around value addition.