Botswana’s Debswana Halts Diamond Operations Amid ...

Botswana’s Debswana Halts Diamond Operations Amid Market Slump, Economic Growth Stalls

Oscar J Jeke - ZimNow Reporter

Botswana’s state-owned diamond producer, Debswana Diamond Company, has temporarily suspended production at several of its mining operations due to plunging global diamond prices, the company announced this week. The move comes after a sharp 46% drop in sales revenue in 2024, marking one of the worst years for the country’s key export in over a decade.

The company, jointly owned by the Government of Botswana and global diamond giant De Beers, confirmed that output will be significantly reduced in 2025, with plans to cut production from 17.9 million carats in 2024 to 15 million carats this year. Affected operations include Jwaneng Cut 9, Letlhakane tailings, and modular plants in Orapa and Jwaneng.

"Global demand remains depressed, and the market has not recovered as expected," Debswana said in a statement. "These adjustments are necessary to align with market conditions and ensure long-term sustainability."

The company emphasized that no involuntary retrenchments are planned. Employees affected by the suspension are being offered voluntary separation packages, and key capital projects such as Jwaneng’s conversion to an underground mine will continue, albeit at a slower pace.

The downturn poses a major threat to Botswana’s economy, which relies heavily on diamond exports for public revenue and foreign exchange. Diamonds account for approximately 75% of the country’s foreign currency earnings and nearly 40% of government revenue. In 2024, the economy contracted by 3%, and the International Monetary Fund now projects a further 0.4% decline in 2025.

Finance Ministry officials have revised the 2025 growth forecast to zero, down from an earlier projection of 3.3%, citing weak global diamond demand and tightening liquidity. The budget deficit is expected to widen to over 7.5% of GDP in the upcoming fiscal year, raising concerns over public spending and delayed payments to suppliers.

"The country’s fiscal position is deteriorating fast," an IMF advisor told reporters in Gaborone. "Structural reforms and diversification away from diamonds are urgently needed."

Botswana’s government says it is exploring alternative revenue streams and prioritizing infrastructure projects to stimulate domestic economic activity. However, with diamonds still underpinning the country’s economic stability, the current downturn could have prolonged effects on employment, investment, and public services if diversification efforts falter.

Debswana, one of the world’s largest diamond producers by value, has not indicated how long the suspension will last but said it would continue monitoring market conditions closely. Global diamond prices have slumped due to oversupply and weaker demand from key markets, particularly China and the United States.