Diamond giant De Beers on Friday announced that it was transferring its London-based rough diamond sales activity to Botswana, a move which could transform Botswana into one of the world's leading diamond trading and manufacturing hubs.

The De Beers Group and the Botswana government have reached an agreement on a new 10-year contract for the sorting, valuing and sales of Debswana's diamond production.

Debswana is a 50-50 mining joint venture between Botswana and De Beers.

The agreement, which commenced from January 2011, is the longest sales contract ever agreed between the two partners and will see De Beers' wholly-owned distribution arm, the Diamond Trading Company (DTC), relocate its sights and sales operations from London to Gaborone by the end of 2013.

"This is a once in a generation opportunity for Botswana and De Beers to shape the future of the diamond industry," said De Beers chairman Nicky Oppenheimer.

According to the diamond giant DTC, from its new base in Botswana, will aggregate production from De Beers' mines, and its joint venture operations worldwide, and sell to international sightholders.

In the meantime the Diamond Trading Company Botswana, a 50-50 sales joint venture between Botswana and De Beers, will continue to sort and value Debswana's production before selling it on to the DTC.

The DTC will continue to support the domestic cutting and polishing industry in Botswana, and will increase its commitment by making more diamonds available for manufacturing businesses operating in the country.

In addition, the agreement provides for an independent sales outlet for the Botswana government, which will begin this year at 10% of Debswana's run of mine production and rise to 15% over a five year period.

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.

"The agreement gives us direct access to market, which will be helpful for the successful development of the downstream diamond industry in Botswana," Kedikilwe said.

"Our agreement is only the first step - much work needs to be done during the next several years to make this transformation a success. As a major player in the diamond trading industry we look forward to welcoming the global diamond industry to Botswana. We are invigorated by the challenge and excited by the possibilities."