Is Botswana Getting A Raw Deal From De Beers Diamonds - The World News [new]

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. Negotiations for a new deal have been ongoing for over a year, and they have turned ugly.

De Beers’ counter is equally simple: We are the only ones with the global marketing machine (the "A Diamond Is Forever" legacy) and the banking relationships to keep prices stable. 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.

But looking forward,

But beneath the polish of that narrative, a seismic shift is occurring. As the global diamond market fragments, synthetic stones flood the market, and De Beers’ grip on the industry loosens, a burning question is echoing from the Kalahari Desert to the corridors of the London Stock Exchange:

"Botswana has been a glorified landlord," says Dr. Kebabonye T. Monagen, an economic historian at the University of Botswana. "They own the land and the resource, but De Beers has been the intellectual and logistical landlord. De Beers decides when to release stones, how many, and at what price to the cutters. Botswana gets a dividend, but not the strategic leverage." The result is a lopsided dependency

Botswana’s bargaining chip is simple: Give us the rough stones, or we will simply refuse to renew your mining license.

The raw deal is not just about money. It is about control. For 60 years, a nation blessed with the world’s hardest gem has been treated like a soft touch. As President Masisi told Parliament last month: "We are not asking for a favor. We are taking what is ours." Negotiations for a new deal have been ongoing

That later is now. The new generation of Botswanan leadership believes the colonial-era training wheels must come off.