Botswana’s Diamond Market Suffers Major Blow as Sales Drop by 49% In First Half of 2024
Sales of rough diamonds in Botswana have dropped significantly in the first half of 2024 as demand for gems slowed in the wake of global economic uncertainty.
According to Botswana’s central bank data, sales of rough diamonds at Debswana Diamond Company fell by 49.2%, amounting to $1.29 billion compared to $2.54 billion in the same period last year.
In local currency, sales of rough diamonds decreased by 47.3% to 17.555 billion pula compared to the same period last year.
This decline in sales is a major blow to the South African nation, which derives 30%-40% of its revenue, 75% of its foreign exchange earnings, and a third of its national output from sales of rough diamonds.
The report highlighted the downturn in the global diamond market as the primary reason for this sharp decline.
In response to the weak consumer demand, Anglo American cut its diamond production by 19% in the first six months of the year.
Reuters reported that the company also revised its output guidance for De Beers down to 23-26 million carats from the previous 26-29 million carats.
The Debswana Diamond Company is a joint venture between the government of Botswana and Anglo American Plc’s De Beers. Anglo American Plc’s (AAL.L) De Beers sells 75% of its output to De Beers, while the balance is taken up by the state-owned Okavango Diamond Company (ODC).
Despite the current economic challenges, Botswana and De Beers signed a ten-year diamond sales agreement in June.
This deal will gradually see the share of Debswana’s output sold by the state-owned company (ODC) increase from 25% to 30% before it goes up to 40% in five years and eventually 50% by the end of the new contract.
According to the key points in the agreement, this strategic move aims to boost Botswana’s revenue from its diamond resources.
