A 10-year diamond deal signed at the new Diamond Trading Centre Botswana on Friday by diamond miner, De Beers Mining Company and the government of Botswana has paved the way for the diamond-rich Botswana to lay direct claim to 10% of the stones mined in its soil and sell them independently.

The signing of the deal follows more than a year of intense negotiations by both parties who sought to get the maximum from the new contract, that is set to transform Botswana from a mere gem producer to a global diamond sales and distribution centre.

The last agreement under which Botswana sold all its diamonds from Debswana, a joint venture between De Beers and the Botswana government for a staggering 20 billion pula a year to the Diamond Trading Company (London)expired in December last year.

It has further been revealed that diamonds from SA, Namibia and Canada will also be aggregated and sold from Botswana to sightholders all over the world.

The new agreement, which is close to a year overdue and is effective retroactively from January 1 this year, will see the DTC relocate its sights and sales operations from London to Gaborone by the end of 2013.

Botswana's Minister of Minerals, Energy and Water Resources, Ponatshego Kedikilwe hailed the agreement as a major step in securing the future of Botswana's economy. "This agreement, and the tangible outcomes it will deliver, will enable Botswana to achieve its aspiration to be a major diamond centre engaged in all aspects of the diamond business."

He stressed that the agreement gives Botswana direct access to market, which will be helpful for the successful development of the downstream diamond industry in the country.

De Beers chairman, Nicky Oppenheimer pointed out that the new deal was an expression of De Beers' confidence in Botswana. "Botswana has preserved and enhanced a highly successful route to market, focused on maximising the value of her natural resource, and De Beers has secured long-term and uninterrupted access to the largest supply of diamonds in the world," Oppenheimer said.

The two leaders said that DTCB must also increase its commitment by continuing to support the domestic cutting and polishing industry in Botswana, and by making more diamonds available for manufacturing businesses operating in the country.

Currently DTCB sells De Beers aggregated diamonds to 16 local sightholders and De Beers stated it would continue to increase its commitment by making more diamonds available for manufacturing businesses operating in the country. At present, Botswana's 16 diamond-polishing and cutting factories need about 5,590 million pula worth of supplies annually. It is said that when the new agreement becomes operational, Botswana will process about 8.3 billion pula worth locally.

De Beers, established in 1888, is the world's leading rough diamond company with expertise in the exploration, mining and marketing of diamonds.

With its joint venture partners, the company operates in more than 20 countries across six continents employing more than 16,000 people, and is the world's largest diamond producer with mining operations across Botswana, Namibia, SA and Canada.

Available figures show that Debswana Mining Company had its production reaching 22.218 million carats in 2010 accounting for 67% of the De Beers total. Its output grew 10% to 11.32 million carats in the first quarter of the year.

Mining contributes over a third of Botswana's GDP, and is estimated at current prices of 27.076 billion pula for the first quarter of 2011.