This significant decline highlights the ongoing struggles in the global diamond market.
Jointly owned by the government of Botswana and Anglo American's De Beers, Debswana sells 75% of its diamonds to De Beers, with the remaining 25% sold to the state-owned Okavango Diamond Company (ODC). A new ten-year sales agreement signed in June last year aims to increase ODC's share of Debswana's output from 25% to 30%, eventually reaching 50% by the end of the contract, allowing Botswana to maximize its revenue from diamond resources.
In the first half of 2024, Debswana's diamond sales amounted to $1.29 billion, a sharp decline from the $2.54 billion recorded during the same period last year, according to the Bank of Botswana. In local currency, sales dropped 47.3% to 17.56 billion pula.
Anglo American, which is restructuring and plans to divest from De Beers, reduced diamond production by 19% in the first half of the year. Last week, De Beers lowered its production guidance to 23 million-26 million carats from an initial 26 million-29 million carats, reflecting the continued market downturn.
Diamonds are crucial to Botswana's economy, accounting for 30%-40% of government revenue, 75% of foreign exchange earnings, and a third of national output. The decline in Debswana's sales underscores the broader challenges facing the diamond industry and its impact on Botswana's economic stability.
