Botswana: Downstream linkages—Leveraging the negotiating position

The document analyzes Botswana's strategy to move beyond diamond extraction by establishing a downstream industry for cutting, polishing, and trading. It highlights how the government used De Beers' declining market power and high reliance on Botswana's rough diamond supply to secure a deal in 2005. This agreement led to the creation of the Diamond Trading Company (DTC) Botswana and the Diamond Technology Park, employing approximately 3,750 people by 2014. However, the study notes challenges from low-cost Asian competitors and the risk that the industry may leave once diamond reserves deplete in 30 to 40 years.

• Botswana's ability to negotiate a sophisticated downstream beneficiation agreement with De Beers was driven by three factors: De Beers' loss of market power, the company's high reliance on Botswana for rough diamond supply and revenues, and the necessity of renewing mining licences.
• The diamond sector is central to Botswana's economy, with Debswana producing 22% of global diamond output and accounting for approximately 70% of export earnings, 30% of GDP, and 50% of government revenues as of 2011.
• A 2005 agreement ensured that a set amount of rough diamonds from Debswana were allocated to Botswana-based cutting and polishing companies, leading to the licensing of 16 international 'sightholders' (which grew to 21) who were required to transfer skills to locals.
• To implement the policy, the government and De Beers created the Diamond Trading Company (DTC) Botswana in 2008 to handle sorting, valuing, and marketing, and established the Diamond Office and Diamond Technology Park to provide infrastructure and fiscal support.
• The downstream policy achieved success by 2014, employing about 3,750 people in cutting and polishing and expanding into diamond trading and jewellery manufacturing, including securing the right to buy 15% of Debswana production for open market sale.
• Botswana faces significant competition from low-cost producers in Asia, particularly India, where cutting and polishing costs are three to five times lower than in Botswana.
• The long-term sustainability of the industry is threatened by the expected depletion of diamond deposits in 30 to 40 years and the potential disruption of skilled labor by computer numerically controlled cutting and polishing technologies.
• While the downstream policy succeeded in its specific sector, it may have hindered broader economic diversification by capturing a disproportionate amount of public policy effort.

APA

Maennling, N., & Toledano, P. (2018). Botswana: Downstream linkages—Leveraging the negotiating position. International Institute for Sustainable Development. https://www.iisd.org/sites/default/files/publications/case-study-botswana-downstream-linkages.pdf

Chicago

Maennling, Nicolas, and Perrine Toledano. Botswana: Downstream linkages—Leveraging the negotiating position. International Institute for Sustainable Development, 2018. https://www.iisd.org/sites/default/files/publications/case-study-botswana-downstream-linkages.pdf.

Wikipedia

{{cite report |last1=Maennling |first1=Nicolas |last2=Toledano |first2=Perrine |title=Botswana: Downstream linkages—Leveraging the negotiating position |publisher=International Institute for Sustainable Development |date=2018 |url=https://www.iisd.org/sites/default/files/publications/case-study-botswana-downstream-linkages.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{maennling2018botswana, author = {Maennling, Nicolas and Toledano, Perrine}, title = {{Botswana: Downstream linkages—Leveraging the negotiating position}}, institution = {International Institute for Sustainable Development}, year = {2018}, url = {https://www.iisd.org/sites/default/files/publications/case-study-botswana-downstream-linkages.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }