Botswana partners gem trader HB Antwerp, seeks to loosen De Beers' grip

Lucara Diamond

27/03/2023 16:02

GABORONE, March 27 (Reuters) - Botswana will take a 24%
stake in Belgian gem processing firm HB Antwerp as it seeks to
gain more value from its diamonds, President Mokgweetsi Masisi
said Monday, a move which might start to loosen De Beers' grip
on the country's diamond industry.
    Botswana’s state-owned diamond trading company, Okavango
Diamond Company (ODC), will also enter into a five-year
agreement to supply rough diamonds to HB Antwerp as part of the
deal.
    “The key commercial terms of the deal have been agreed and
the deal will be signed in the coming weeks. Today is the dawn
of a new era for the diamond industry in Botswana, as we begin
this journey with HB Antwerp,” Masisi said during the official
opening of HB Antwerp’s cutting and polishing facility in
Gaborone.
    Botswana, which jointly owns Africa’s largest diamond
producer Debswana with global giant De Beers, a unit of Anglo
American Plc  AAL.L , is moving to explore other options outside
the 54 year-old De Beers partnership. 
    The two partners are currently in talks to renew a 2011
sales and marketing agreement which entitles De Beers to 75% of
the production from Debswana.
    Masisi has threatened to walk away from the talks if
Botswana does not get a bigger share of Debswana’s output for
marketing outside the De Beers system. The government has not
publicly stated what share it seeks, but it is believed to be as
high as 50%, double the current allocation.
    Founded in 2020, HB Antwerp is currently in partnership with
Lucara Diamond Corp  LUC.TO , buying stones of 10 carat quality
and above from the Toronto-listed miner's Karowe Mine in central
Botswana at prices based on the estimated polished outcome of
each diamond, determined through state-of-the-art scanning and
planning technology.
    HB Antwerp says this model, which it seeks to replicate with
ODC, allows Lucara to earn 40% more than it would from selling
at rough diamond market prices.
    “It’s a strategic partnership, it will add more value to
Botswana not just in terms of price or money, but empowering the
people of Botswana,” HB Antwerp co-founder Rafael Papismedov
told Reuters.


 (Reporting by Brian Benza; Editing by Nelson Banya and
Christina Fincher)
 ((Nelson.Banya@thomsonreuters.com;))