Is Botswana Getting A Raw Deal From De Beers Diamonds - The World | News
To gauge if Botswana is getting a raw deal, one must look at the historical trajectory. In 1967, when the Orapa pipe was found, Botswana had 12 kilometers of paved road. Sir Seretse Khama, the founding president, made a prescient deal with Harry Oppenheimer. He accepted a lower immediate royalty in exchange for the "reserved right" to buy into the asset later.
That later is now. The new generation of Botswanan leadership believes the colonial-era training wheels must come off.
Yet, the risk is immense. Without De Beers’ sales network, could Botswana manage the "price integrity" of its gems? If Botswana takes 50% of its rough and supplies go up while De Beers reduces marketing support, the value of rough diamonds could plummet, hurting everyone. To gauge if Botswana is getting a raw
The central argument for Botswana getting a "raw deal" revolves around value addition.
Historically, De Beers mined the rough diamonds in Botswana and shipped them to London, where they were sorted, aggregated, and sold to manufacturers. The high-value activities—sorting, cutting, polishing, and retail—happened elsewhere, keeping the bulk of the economic profit outside Botswana’s borders. Improved terms in recent renegotiations
While De Beers moved its "sights" (sales events) to Gaborone in 2013, a symbolic victory for the nation, critics argue this was a logistical shift rather than a structural economic transformation. Botswana still sells the rough stones. The lucrative downstream industries—where a rough stone becomes a polished jewel sold in a boutique in New York or Hong Kong—remain largely out of reach for the Batswana economy.
The government is now demanding a larger share of the rough diamonds to be processed locally, aiming to turn Botswana into a global diamond hub, not just a supplier of raw materials. Strategic use of proceeds and diversification efforts
To understand the current friction, one must look at the current sales agreement, set to expire soon. The prevailing myth is that Botswana (through its state-owned entity, Okavango Diamond Company) and De Beers are equal partners—a 50/50 joint venture known as Debswana.
On paper, that is true. Debswana mines the diamonds. But here lies the rub: De Beers controls the sight. For decades, virtually all of Botswana’s rough diamonds were sold exclusively through De Beers’ London-based sales arm. Botswana got 50% of the mining profits, but De Beers captured the margin on sorting, valuing, and global distribution.
The result is a lopsided dependency. Botswana’s economy is a diamond monolith—roughly 30% of its GDP, 50% of government revenue, and 80% of its exports are tied to these stones. When De Beers decides to flush the pipeline or lower prices, Botswana bleeds.