In June final 12 months Botswana and De Beers agreed a brand new 10-year diamond gross sales settlement, which can see ODC’s share of Debswana output rise to 30% initially after which enhance progressively to 50% by the top of the deal, because the nation seeks to get extra income from its assets.
Following the maturity of a $140 million working capital facility in 2023, Serame mentioned ODC has appointed Commonplace Chartered Financial institution to construction and coordinate a brand new $300 million syndicated revolving working capital facility.
ODC is at the moment solely in a position to afford purchases as much as $70 million utilizing its personal money reserves, Serame instructed lawmakers as she sought approval for a $175 million authorities assure for the brand new credit score facility.
“The $175 million authorities assure will crucially assist ODC’s elevated entitlement of 30% to Debswana’s tough provide, in addition to help the corporate in negotiating beneficial charges within the native market on a brand new working capital facility,” Serame mentioned.
The diamond business is at the moment going by a market downturn which has seen gross sales at Debswana fall 49% within the first half of the 12 months.
In October final 12 months, ODC briefly halted its tough gross sales as a part of an business extensive drive to cut back the glut of stock within the chopping and sharpening business brought on by weaker international demand for jewelry.
The diamond business is predicted to start out recovering from the affect of weak international demand in the course of the fourth quarter of 2024, Serame mentioned, and availability of the credit score facility would put ODC in place to profit from the restoration.
(By Brian Benza; Enhancing by Nelson Banya and Susan Fenton)