The Botswana - De Beers Paradox

Botswana wants to double its stake in De Beers. It also wants to reduce the dominance of De Beers in its diamond industry. There's a curious paradox here.

On the one hand, President Duma Boko announced just this week that Botswana intended to increase its shareholding in the loss-making diamond group from 15% to 30%.

That's more than the 25% figure reportedly under discussion, but considerably less than the majority stake he was seeking as recently as April 2026.

On the other hand, Botswana is gradually increasing its share of the marketing and sale of its own diamonds, not through De Beers, but via its wholly-owned marketing enterprise, Okavango Diamond Company (ODC).

Less than a decade from now, ODC is scheduled to be marketing half of all the diamonds produced by Debswana, its 50-50 joint venture with De Beers - at the same time as it is De Beers' largest individual shareholder.

That would put it in a position of significant influence, even as the natural diamond sector faces an increasingly difficult future.

The distinction between ownership and marketing is important. Botswana has been an equal partner in Debswana since 1975 and receives an equal share in the financial returns. But for decades De Beers controlled virtually all the marketing and sale of its production.

That began to change with a 2011 agreement, which gave Botswana an initial 10% allocation of Debswana's production to market independently through ODC, established in 2012.

The allocation rose to 15% by 2016 and 25% in 2020. Under a new agreement signed in 2025, it increased to 30% for the first five years, from 2025 to 2030.

The next stage will see ODC's share rise to 40% for 2030-2035, and if the agreement is extended for a further five years, it will then hit 50%.

The scale of the current arrangement is considerable. Debswana produced approximately 15.1 million carats in 2025. Under the present 70-30 split, De Beers markets about 10.6 million carats and ODC approximately 4.5 million.

ODC now has its own sales channels, including 10 annual online spot auctions, tenders reserved for citizen-owned companies and longer-term supply contracts. The government reported that ODC sold $457 million worth of diamonds in 2025, compared with $425 million in 2024.

Botswana wants its own customers, pricing mechanisms and greater freedom to decide how and to whom its diamonds are sold. It is seeking to move beyond dependence on De Beers' established sightholder system and develop its own understanding of what its diamonds are worth in the market.

None of this is new or surprising. Botswana was one of the world's poorest countries when it gained independence from Britain in September 1966. Just five months later, De Beers geologists discovered the kimberlite deposit that would become Orapa, transforming the country's economic prospects.

Botswana had no clue about mining or marketing diamonds. De Beers, which then dominated the international rough diamond trade, became an obvious and virtually indispensable partner.

Over time, Botswana grew economically, developed its own mining expertise and began to wean itself off De Beers. It has been a gradual process, but this week's confirmation that it is seeking a 30% stake adds an interesting new twist.

Its twin objectives - a bigger share of De Beers, less dependence on De Beers - are not necessarily contradictory.

Botswana wants greater influence inside De Beers as a shareholder, while developing a more independent commercial operation outside its marketing structure.

A 30% stake would give it a bigger voice in De Beers, while ODC's growing allocation would give it greater autonomy over the sale of Debswana's diamonds.

There are limits to that independence. It still wouldn't have control of De Beers, and ODC's independence is in marketing, not mining.

Botswana also wants to capture more value after diamonds leave the mines. The 2025 agreement includes commitments for a jewelry manufacturing facility, a De Beers grading laboratory and a vocational training institute, with the aim of expanding local cutting, polishing, grading and jewelry production.

But the ambition extends beyond changing Botswana's position within the diamond industry. It also wants to reduce the importance of diamonds to its wider economy.

The prolonged downturn in natural diamond demand has exposed the country's vulnerability to a market over which it has limited control. Competition from lab growns and weaker sales contributed to an economic contraction in 2025.

The Diamonds for Development Fund is intended to help address that exposure. De Beers transferred an initial $74 million, to the fund in October. It is designed to attract investment into other industries, support businesses and create employment.

Botswana's strategy is about more than acquiring a larger share of De Beers. It wants to capture more value from its diamond resources, take greater control of their route to market and use diamond wealth to build an economy less exposed to the fortunes of natural diamonds.

It is not turning away from De Beers. It is seeking a different relationship with it. More influence as a shareholder, less dependence on its marketing system and, ultimately, a future that does not depend on diamonds alone.

Have a fabulous weekend.