Debswana diamond sales in Botswana drop by 48% in the first quarter

Data from Botswana’s central bank on Friday revealed that the Debswana Diamond Company’s rough diamond sales dropped 48.3% in the first quarter of 2024 as the weak market conditions from 2023 persisted into the start of 2024.

Owned equally by Anglo-American Plc (AAL.L) and Botswana, Debswana opens a new tab De Beers and sells 75% of its output to De Beers. The Okavango Diamond Company (ODC), which is controlled by the state, takes up the remainder.

In an effort to increase revenue from its resources, Botswana and De Beers reached a new ten-year diamond sales agreement in June of last year. Under the terms of the agreement, ODC’s share of Debswana output will increase to 30% at the time of contract signing and then progressively to 50% by the end of the agreement.

Debswana sold diamonds for $560.9 million in the first quarter of this year, down from $1.085 billion during the same period in the previous year. The decline in Debswana sales was less severe in local currency, decreasing 45.6% to 7.676 billion pula ($560.35 million).

Due to the challenges faced by the global diamond market in 2023—including competition from lab-grown stones and global financial uncertainty—major industry participants took action in the last quarter of the year to reduce a supply glut that was the result of weak consumer demand.

Green shoots of an upturn have emerged in the market, albeit the balance of this year is projected to see a sluggish pace of recovery.

Anglo, which escaped a hostile takeover attempt this week from larger rival BHP Group (BHP.AX), has opened a new tab and intends to sell off De Beers as part of its reorganization.

Although De Beers and Botswana have agreed to complete their new agreement by June 28, the deal has been clouded by BHP’s takeover aspirations.
Mokgweetsi Masisi, the president of Botswana, expressed his hope on Wednesday for a speedy De Beers sale to avoid Anglo being vulnerable to a potential hostile acquisition.

13.6986 pulas for $1.