Botswana's diamond giant slashes output as demand falls
AFP via Getty ImagesBotswana's main diamond company has paused production at some of its mines, citing a prolonged downturn in global demand.
Debswana, a joint venture between the government and global mining giant De Beers, saw its sales revenue drop by almost 50% last year.
Botswana is the world's largest producer of diamonds by value. The industry accounts for a quarter of the country's total annual income (GDP), according to the International Monetary Fund.
On Friday, Debswana said production this year is being scaled back to 15 million carats - approximately a 40% decrease from its output in 2023.
The company, which accounts for around 90% of Botswana's diamond sales expects this reduced output will lead to "significant cost savings" across areas like fuel and electricity.
In a statement, Debswana said it continued to "prudently navigate the challenging market conditions" citing low demand and "emerging pressures such as US-imposed tariffs".
The global market for mined diamonds has been experiencing a decline since 2023, partly due to the availability of lab-grown alternatives.
In response to this downturn, Debswana paused production at its flagship Jwaneng mine, as well as its Orapa mines, last month. Each mine will be closed for three months in total.
The southern African country has for decades been trying to shift its economy away from being dependent on diamond sales, to varying degrees of success.
Although successive governments have boosted sectors such as tourism, finance and the mining of minerals such as copper, diamond sales still make up three-quarters of Botswana's foreign exchange earnings.
This income is likely to be hit by Debswana's decision to temporarily close its mines.
The company has stressed that no involuntary job cuts are planned, although it continues to offer voluntary redundancy.
As a result of the sustained downturn in the global diamond industry, Botswana will cut its 2025 economic growth forecast to almost zero, a senior finance official was quoted as saying by the Reuters news agency.
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