Botswana’s state-owned Okavango Diamond Company (ODC) will begin selling diamonds to contracted buyers next month as part of efforts to diversify its sales channels under the government’s new agreement with De Beers, managing director Mmetla Masire announced on Wednesday, Reuters reported.
Under the new ten-year deal signed in February, ODC’s share of production from Debswana, the government’s 50-50 joint venture with De Beers, was raised from 25 percent to 30 percent, with the allocation set to reach 40 percent by the end of the contract.
A clause in the previous deal that barred ODC from directly competing with De Beers on contract sales has now been removed.
“We are targeting our first sales through this channel in November, with our first two being pilot sales before we go full scale on the third,” Masire told a mining conference.
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Masire previously told Reuters in May that ODC plans to sell about 40 percent of its supply through contract sales, with the rest distributed via auctions, strategic partners, and Botswana-based companies.
However, the global diamond market remains under pressure, facing a prolonged downturn caused by falling demand, an oversupply of rough stones, and growing consumer interest in lab-grown diamonds.
In 2023, ODC temporarily suspended rough diamond sales as part of an industry-wide move to ease the supply glut.
Although the company held an auction on September 25 this year, it chose to retain its stones, citing “conditions that could have resulted in a significant negative impact on the market.”
According to Masire, ODC’s 2024 revenues were roughly 60 percent of the previous year’s total due to the market slump, though the company has recently seen signs of stabilization.
Its last three auctions produced small positive margins, a notable improvement from the double-digit losses recorded during the same period last year.
Diamonds remain vital to Botswana’s economy, contributing about 30 percent of government revenues and 75 percent of foreign exchange earnings.
The ongoing market downturn has taken a toll, with the economy contracting by 3 percent in 2024. The International Monetary Fund projects a further 1 percent decline this year.
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Image Credit: Reuters
