Bank of Botswana data released this week indicates that Debswana’s sales were nearly 50% higher year-on-year, a trend the Finance ministry has attributed to a rebound in global economic activity and sanctions on the world-leading rough diamond producer, Russia, for its invasion of Ukraine.
While Debswana’s full-year production figures for 2022 are due to be confirmed next month, information previously sourced by BusinessWeek indicated that the diamond giant was due to produce 23.6 million carats last year, the highest since 2018. This was despite pressures on output arising from a P1 billion increase in operating costs, particularly around fuel and spares.
By the end of September, Debswana’s production for the year stood at 18.4 million carats, about seven percent higher than the corresponding period in 2021. In 2021, Debswana’s mines produced 22.3 million carats which at the time represented the highest level since 2019.
Without providing figures, Minerals and Energy minister, Lefoko Moagi told BusinessWeek Debswana, the world’s second-largest producer of rough diamonds, had pushed hard to plug the gap caused by the boycott of Russia’s production.
“If you look at the fact that Russia accounts for 30% of small diamonds, this means that when those in their raw form cannot be traded in the Western world where they were sold and it means that we must also gear up to see how to plug that gap,” he told BusinessWeek on the sidelines of a briefing last week. “But it’s a tall order because 30% is no small feat. “When you are to plug that gap with production and you ask Jwaneng to increase, they won’t plug that gap easily.”
Looking forward into this year, Moagi said the country was fine-tuning its preparedness for a possible slowdown in the global economy.
“We have overcome this challenge before in the recession of 2008–09. “We believe that when we look at what we did and the other lessons we have learnt since then such as during COVID-19, the anticipated slowdown is something we can survive,” he said.
Debswana sells 15% of its production to the state-owned Okavango Diamond Company and the balance through the De Beers’ marketing platforms. Government and De Beers are finalising negotiations for a new sales deal which will govern the conditions under which diamonds from the Debswana mines are traded through the De Beers system.
