Debswana Diamond Company's rough diamond production dropped by 31 percent to 4.2 million carats in the fourth quarter of 2024, compared to 6.1 million carats produced in the corresponding period in 2023. This is due to subdued global demand for diamonds.
The production information report is contained in the Bank of Botswana (BoB) Monetary Policy Report for April 2025 that was published last week by the central bank and it is currently under review. BoB noted in the report that Debswana's production for 2024 amounted to 17.9 million carats, falling short of the target of 20.7 million carats.
It said the production guidance for the larger De Beers Group was 29 - 32 million carats in 2024.
"However, the production guidance for 2025 has been revised downwards to 20 - 23 million carats from 30 - 33 million carats, reflecting the challenging rough diamond trading conditions," BoB explained.
The decline in Debswana production comes at a time when the rough diamonds industry is facing global uncertainty due to weakened global demand, a situation that is likely to be worsened by the 37% tariffs imposed by the United States of America on Botswana's exports, including the diamonds.
Industry experts have warned of high volatility on the mineral sector due to the US tariffs.
Charles Siwawa, Chief Executive Officer of Botswana Chamber of Mines (BCM), said Botswana's rough diamonds are undergoing a torrid time, adding that the tariffs would worsen the situation further.
Siwawa said the USA is a big market for Botswana rough diamonds and the higher tariffs rate would reduce Botswana's exporting capacity of diamonds, effectively reducing further government revenue sourced from the mineral exports.
"The whole tariffs situation would impact negatively on the economy. We will likely to see cost of production increasing in the mining sector will profitability remains lower. Diamond producers could slow down production with that likely to impact on employment as well," cautioned Siwawa.
BoB said production at Lucara Diamond Corporation (Karowe Mine) decreased by 7.3 percent to 91 046 carats in the fourth quarter of 2024, from 98 177 carats produced in the corresponding period in 2023. The decrease is also partly attributed to sluggish demand for rough diamonds and diamond jewellery.
Meanwhile, Karowe Diamond Mine projects to produce 360 - 400 thousand carats in 2025 with an estimated sales of 400 - 420 thousand carats.
To buttress the gloomy outlook on Botswana's rough diamonds crisis, Anglo American in its latest production report for the first quarter ended 31 March 2025 indicated that rough diamond production decreased by 11% to 6.1 million carats, reflecting the continued production response to the prolonged period of lower demand.
In Botswana, Anglo American said production decreased by 8% to 4.6 million carats as a result of the planned actions to lower production.
According to Anglo, the consumer demand for diamond jewellery in the United States over the year-end holiday season was in line with the expectations. However, rough diamond demand in the first quarter remained subdued as the midstream continued its cautious approach to restocking due to excess loose polished diamond inventory.
Global prices
Commenting on the global commodity prices, BoB said the global rough diamond price index decreased by 6.2 percent from 134.3 points in the fourth quarter of 2024 to 125.9 points in the first quarter of 2025. The decline was mainly due to weaker demand by major end product consumers, such as China and the US.
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In addition, BoB highlighted that the demand for natural diamonds has been impacted by increased competition from other luxurious goods, especially lab-grown diamonds, which are gaining popularity as a substitute product.
It said lab grown diamonds currently hold 20-25 percent of market share and are projected to account for approximately 30-40 percent of the total diamond market by 2030, up from nearly zero in 2015.
On the other hand, it said the global polished diamond price index decreased by 7.3 percent from 98 points in the third quarter of 2024 to 91 points in the fourth quarter, due to weaker demand and a challenging global economic outlook.
"Similarly, the global polished diamond price index decreased by 3 percent from 92 points in November to 89 points in December 2024," Anglo American added.
