As the world continues to demand more transparency and accountability from mining companies, De Beers and the government of Botswana must work together to ensure that the diamond industry benefits both the company and the country.
Economic outcomes: measurable benefits to Botswana As the world continues to demand more transparency
Is Botswana getting a raw deal? In the strictest financial sense regarding value addition and downstream integration, the answer has historically been yes . The nation has been a passive supplier of raw wealth rather than an active participant in the luxury market. The nation has been a passive supplier of
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. In 1967, when the Orapa pipe was found,
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.
For decades, the partnership between Botswana and De Beers has been hailed as the "gold standard" of natural resource collaboration. Since the discovery of diamonds shortly after independence in 1966, Botswana has transformed from one of the poorest countries in the world into an upper-middle-income nation. Much of that success is credited to the 50/50 joint venture with the diamond giant.
For most of the partnership, all diamonds were flown to De Beers’ headquarters in London for sorting and valuation. Botswana provided the raw material, but the intellectual capital—the science of knowing which stone goes to which jeweler—remained abroad. President Mokgweetsi Masisi has famously called this arrangement "unsustainable," demanding that sorting and valuation happen entirely within Botswana’s borders.