An agreement for the sale of Botswana's diamonds between the government and De Beers' Diamond Trading Company that had been due to expire on December 31, 2010, has been extended through March 31, 2011 while negotiations continue, the Mmegi.bw news site reports.

The agreement, through which Botswana sells all diamonds produced by Debswana – a joint venture between De Beers and the state – is worth some $3 billion.

According to Mmegi, despite the fact that renewal negotiations were ongoing throughout most of the second half of 2010, the sites failed to hammer out a new deal.

Stephen Lussier, De Beers Executive Director, gold BusinessWeek that some of the negotiating teams' key members had been "unavailable for a while," which caused the sides to miss the deadline. Lussier said he expected to see a new agreement in place by the end of Q1 2011.

The talks have been conducted fairly close to the chest, but some media reports last year indicated that the government was seeking to sell some of the country's diamonds independently of the DTC. Documents published by WikiLeaks said that Botswana is considering founding a consortium with De Beers, the government of Namibia, and the Anglo American mining company that would give Botswana an 80% stake in 30% of the country's diamond trade.

The Firestone and Lucara diamond companies have already received permission to sell diamonds produced at the BK11 and AK6 mines in extra-DTC tenders.