Botswana’s main diamond company has suspended production at some of its mines, saying, it is as a result of prolonged fall in global demand.
The Southern Africa country is the largest producer of diamonds by value in the world. The industry accounts for a quarter of the country’s total annual income (GDP), according to the International Monetary Fund (IMF).
Debswana said on Friday, production this year is being measured back to 15 million carats – approximately a 40% shrink from its output in 2023.
Debswana is a joint enterprise between the government and global mining giant De Beers; it watched as its sales revenue fell by almost 50% last year.
The company via a statement said, it continued to “prudently navigate the challenging market conditions” as a result of low demand and “emerging pressures such as US-imposed tariffs”.
The world market for mined diamonds has been witnessing a decrease since 2023, partly as a result of the availability of lab-grown alternatives.
Debswana accounts for around 90% of Botswana’s diamond sales, and the company expectation is that, this fallen output will bring about “significant cost savings” across areas like fuel and electricity.
Botswana has been making effors for decades to move its economy from being dependent on diamond sales, to varying degrees of success.
Despite successive governments boosting sectors such as tourism, finance and the mining of minerals such as copper, diamond sales still emerge as three-quarters of Botswana’s foreign exchange earnings.
There is a high possibility that the country’s income might be affected adversely by Debswana’s decision to temporarily close its mines.
