Debswana Diamond Company’s rough diamond sales fell 48.3% in the first quarter of 2024, data released by Botswana’s central bank showed Friday, as the sluggish market conditions faced in 2023 continued into the beginning of the new year.
Debswana, equally owned by Botswana and Anglo American Plc’s De Beers, sells 75% of its output to De Beers. The balance is taken up by the state-owned Okavango Diamond Company (ODC).
Botswana and De Beers in June last year agreed a new ten-year diamond sales agreement under which ODC’s share of Debswana output will rise to 30% at the signing of the new contract before it rises gradually to 50% by the end of the new contract, as the country seeks to get more revenues from its resources.
In the first quarter, Debswana sold diamonds worth $560.9 million, from $1.085 billion registered in the same period last year. In local currency pula terms, the decrease in Debswana sales was lower falling 45.6% to 7.676 billion pula ($560.35 million).
The global diamond market struggled in 2023 due to global macroeconomic uncertainty and competition from lab-grown gems, leading to major industry players in the last quarter of the year taking measures to ease a supply glut in the pipeline caused by sluggish consumer demand.
The market has, however, started to see green shoots of an upturn, although the pace of recovery is expected to be gradual through the rest of this year.
Anglo, which this week managed to fend off a takeover bid by bigger rival BHP Group, plans to divest De Beers as part of its restructuring.
De Beers and Botswana have an agreement in place to finalize their new deal by June 28, but BHP’s takeover attempts had brought uncertainty to the deal.
Botswana’s President Mokgweetsi Masisi on Wednesday said he hopes for a quick sale of De Beers before Anglo is exposed to a possible hostile takeover.
($1 = 13.6986 pulas)
(By Brian Benza; Editing by Nelson Banya and Sharon Singleton)
