Okavango Aims for Stability with More Contract Sales
February 17, 26
(IDEX Online) - Botswana's state-owned Okavango Diamond Company (ODC) is moving away from auctions and tenders and now aims to sell half its rough allocation through contract sales.
They offer more predictable revenues, especially when global demand is so weak.
ODC started pilot contract sales - which operate much like De Beers' sights - last November.
They were allowed for the first time in the new 10-year marketing agreement between the Botswana government and De Beers, which was signed in February 2025.
ODC had previously relied entirely on spot auctions and citizen tenders that each took place 10 times a year.
ODC receives an allocation (currently 30 per cent, and increasing) of the rough produced by Debswana, the 50-50 joint venture between the Botswana government and De Beers. The remainder is sold by De Beers.
ODC's acting managing director Lipalese Makepe told Reuters: "We piloted the contracts in November and December with an average of 14 customers." That number will increase to 32.
She said the company planned to sell about half its Debswana allocation, by value, at contract sales.
ODC selects qualified, long-term customers - mainly established manufacturers - limiting contracts to specific volumes, qualities, and pricing bands agreed upfront.
Contract sales use indexed pricing to share upside and downside risks with buyers, a move ODC hopes will stabilize cash flow.