Botswana diamonds regain their sparkle

• Positive consumer demand drives recovery while COVID-19 related uncertainties still cast a shadow on diamond sales

Botswana diamonds regain their sparkle

Demand for diamonds has seen a steady rise after a 2020 slump caused by the COVID-19 pandemic affecting the global sale and distribution of diamonds.

But diamonds have lately proved to be resilient to the ever volatile global conditions as seen by consumer demand for diamond jewellery since the holiday season, as well as support from the midstream sector.

The Minister of Minerals, Green Technology and Energy Security, Lefoko Moagi, was proud to be the bearer of this good news when he presented his budget proposals before the Committee of Supply in Parliament this week.

Moagi spoke of “a steady demand for rough diamonds in the last quarter of 2020”, although he hastened to add that risks associated with COVID-19 presented challenges to the overall recovery of the sector.

“As part of interventions to mitigate against travel restrictions globally, my ministry authorised diamond producers to take diamonds directly to the markets in Europe and Asia to sell after valuation by our government diamond valuers,” he said but noted: “While the sales have resumed, the market remains fragile.”

Outlining the negative effects of the pandemic on the diamond sector, Minister Moagi continued: “The Debswana Diamond Company sold 17.1 million carats during the year ended December 2020 against a prior year sales of 22.0 million. The Okavango Diamond Company (ODC) sold US$207 million worth of rough diamonds in 2020 compared to US$440 million in 2019.”

Lucara Botswana suffered a similar fate, making international sales of  US$ 107 million in 2020 compared to US$ 330 million in 2019. “Operations at Karowe Mine produced 309 054 carats and sold 268 048 carats as at December 2020 compared to 433 014 carats produced and 240 245 carats sold in the previous year,” the minister told Parliament.

“The mine recovered two exceptional stones weighing 998 carats and 549 carats during the year. The mining licence for Karowe Mine was renewed and extended to 2046 as the mine intends to go for underground production in 2026. The mine currently employs 871 employees and 865 (99.3 percent) are citizens.”

Meanwhile, announcing its second cycle of diamond sales last week, De Beers reported sales of $550m which it said denoted recovery for the sector.

“We saw the continuation of good rough diamond demand during our second sales cycle of 2021 on the back of positive consumer demand for diamond jewellery,” said De Beers CEO, Bruce Cleaver.

But Cleaver also warned of ongoing uncertainties that may impact sales in the short-term.