Botswana: Rough diamonds and harsh cutbacks
Faced with a slump in rough diamond sales in 2008, Botswana’s national diamond producer, Debswana, opted for production cuts. The hope now is that the market will recover within the next 18 months.
Botswana is the world’s largest diamond producer by value but its exports, worth $3bn last year, could now be worth less than $1.5bn. The slump has hit Gaborone’s ‘diamond hub’, which aims to establish a diversified diamond sector less prone to shocks, based on diamond cutting and polishing. Many cutting firms have been unable to purchase rough stones and have since shed jobs.
De Beers, the government’s 50% partner in Debswana, has delayed shifting to Gaborone most of its global sorting operations. The government and De Beers deny that the postponement has caused a rift. But there have been renewed calls from opposition politicians and business groups for Botswana to revise its marketing agreement with De Beers and to consider selling some production independently.