Sales of rough diamonds at Debswana Diamond Company fell by 49.2% to $1.29 billion in the first half of the year, compared to $2.54 billion in the same period last year, according to Botswana’s central bank data. In local currency, sales dropped by 47.3% to 17.555 billion pula.
This decline is a significant setback for Botswana, which relies on rough diamond sales for 30-40% of its revenue, 75% of its foreign exchange earnings, and one-third of its national output.
The report attributed the sharp decline to a downturn in the global diamond market.
In response to 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.
Debswana Diamond Company is a joint venture between the government of Botswana and Anglo American Plc’s De Beers.
De Beers sells 75% of Debswana’s output, while the state-owned Okavango Diamond Company (ODC) takes the remaining 25%.
Despite the current challenges, Botswana and De Beers signed a ten-year diamond sales agreement in June.
This deal will gradually increase the share of Debswana’s output sold by ODC from 25% to 30%, eventually reaching 50% by the end of the contract.
This strategic move aims to boost Botswana’s revenue from its diamond resources, according to the agreement’s key points.
