Botswana’s diamond stockpile has grown to almost twice the government’s target inventory level as weak global prices persist, limiting the country’s ability to raise production in the near term to support economic growth, the finance ministry has said.
According to Reuters, the economy is expected to contract by nearly 1 percent in 2025, following a 3 percent decline the previous year, largely due to the sharp fall in diamond prices.
The slump has been driven by competition from lab-grown diamonds and subdued global demand.
As a result, Debswana, the joint venture between the Botswana government and De Beers that accounts for about 90 percent of the country’s diamond sales, temporarily halted production at some of its mines last year.
According to the Kimberley Process Certification Scheme, Botswana produced 18 million carats of diamonds in 2024, making it the world’s second-largest producer after Russia.
By the end of December 2025, Botswana’s diamond stockpile had reached 12 million carats, nearly double the government’s allowable inventory limit of 6.5 million carats, according to the finance ministry’s 2026/27 Budget Strategy Paper reviewed by Reuters on Tuesday.
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“This suggests that, over the short term, production is expected to remain broadly unchanged, until the level of inventories is drawn down closer to minimum allowable levels, creating room for additional production,” the ministry said in the document.
It added that the limited ability to increase output would continue to constrain the economy unless the non-mining sector delivers strong growth.
Diamonds typically account for around one-third of Botswana’s national revenue and about three-quarters of its foreign exchange earnings.
Botswana’s exports to the United States, including diamonds, are now subject to a 15 percent tariff.
The ministry warned that higher tariffs imposed on major diamond-consuming markets such as India could further depress prices and squeeze profit margins.
“This may ripple through to mining operations. A slowdown in mining activity would reduce government’s fiscal revenues from the sector,” the ministry said.
Mineral revenues are projected to reach 10.3 billion pula ($729.24 million) in the 2025/26 financial year, well below the historical annual average of 25.3 billion pula, reflecting weaker diamond sales.
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Image Credit: Mining.com
