De Beers is extending its decade-long sales agreement with Botswana, where it sells diamonds from the world’s best mines, for another year to give the sides more time to hammer out a new deal.
The accord was due to end this year, but the two parties said logistical challenges from the coronavirus pandemic mean they need more time to negotiate its replacement.
The agreement between the world’s top diamond producer and the country has in the past been a source of contention. It took years to negotiate the last deal, which led to De Beers moving all its diamond selling and sorting staff to the southern African country from London.
The Anglo American Plc unit has been mining diamonds in Botswana for half a century. It uncovers the stones under a joint venture with the government called Debswana, and then has exclusive rights to sell them. The deal is crucial for both sides — Botswana accounts for more than two-thirds of De Beers’ output, while the country relies on diamonds for 90% of its exports.
The extension will be under terms of the existing agreement, De Beers said in a statement Tuesday. The company offers its gems through 10 sales a year in the capital, Gaborone, and buyers — known as sightholders — generally have to accept the price and the quantities offered.