Africa-Press – Botswana. Former chief executive officer (CEO) of De Beers Botswana, Sheila Khama, has issued a muted caution to the government on its agreement with HB Group – a technology business that specialises in diamonds.
This follows the termination of a sales deal with HB by Lucara Diamond Corp., a Canadian diamond mining firm with a producing mine and exploration licenses in Botswana, on September 27 due to a breach of financial commitments.
“If this is true, it’s difficult to see how Botswana will proceed with its partnership with HB because surely the writing is on the wall,” commented Khama on X (formerly known as Twitter), adding that “if I were @BWGovernment, I would make a run for it.”
In a statement posted on their website, Lucara noted that “Lucara exercised its right to terminate the agreement following a material breach of financial commitments by HB. Lucara will continue to use its established mechanisms to sell Karowe’s rough diamond production, namely through its Clara diamond sales platform, traditional tenders and other value-added mechanisms for stones.”
President Dr. Mokgweetsi Masisi said on Friday that a course of action will be taken in response to the announcement that Lucara Diamond had cancelled its agreement with HB Antwerp. He did warn, though, that “nobody will stop us from participating in the diamond value addition.”
Early this year, President Masisi announced that the government of Botswana and HB Antwerp have agreed to a strategic partnership whereby the Government of Botswana will invest in HB by acquiring a 24% stake in the diamond company. As part of the agreement, Botswana’s state-owned diamond trading enterprise, Okavango Diamond enterprise (ODC), would supply rough diamonds to HB Antwerp for five years, with all the value addition taking place in Botswana.
Despite fears that HB would take over from De Beers, the Botswana government and De Beers Group finally reached an agreement for the sales of Debswana’s rough diamond production early this year. For more than 48 months, the two sides had remained impassed in negotiations.
“While the partners finalise the implementation of the formal Sales and Mining Agreements, an Interim Agreement will preserve the terms of the most recent Sales Agreement which expired on 30 June,” reads part of the statement issued earlier this year. The ten year deal runs through 2033.
De Beers is one of the biggest tax payers in Botswana. The total amount of taxes paid for 2022 was P15.2 billion, up from P13 billion paid in 2022. The entire tax for 2022 is broken down into P8 billion in taxes and royalties, P4.8 billion in corporate taxes, and P2.4 billion in royalties and mining taxes.
De Beers purchases diamonds from mines it owns in South Africa, Namibia, Canada, and South Africa. These diamonds are then combined with Botswana diamonds, which make up almost 70% of De Beers’ inventory, and imported.
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