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Weak demand to reduce Debswana diamond sales by 25.1% in 2023

Debswana Diamond Company experienced a notable decline in rough diamond sales, marking a 25.1% decrease in 2023, according to data disclosed by Botswana’s central bank on Thursday. This downturn reflects an economic slowdown impacting luxury goods demand in key markets such as the U.S. and China, alongside heightened competition from lab-grown gemstones.

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As a joint venture equally owned by Botswana and Anglo American Plc’s De Beers, Debswana allocates 75% of its rough diamond output to De Beers, with the remaining portion supplied to the state-owned Okavango Diamond Company (ODC).

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The central bank’s report indicates that Debswana’s diamond sales totaled $3.44 billion in 2023, a notable decrease from the $4.59 billion recorded in the preceding year, which saw record sales.

Despite the decline in sales, Debswana’s production witnessed a modest increase of 2% in 2023, reaching 24.7 million carats. However, in response to market conditions, the company announced plans to reduce production in the current year.

In efforts to address oversupply concerns, major industry players have implemented measures to regulate supply. Notably, India, responsible for cutting and polishing 90% of the world’s rough diamonds, initiated a two-month import pause. Additionally, ODC canceled its November and December auctions.

Matshidiso Kamona, Debswana’s senior corporate affairs manager, disclosed in January that the company intends to scale back output in light of diminished demand for rough diamonds globally. However, specifics regarding production targets for 2024 were not disclosed.

Last year, Botswana and De Beers reached a new 10-year diamond sales agreement. Under this agreement, ODC’s share of Debswana’s output will increase to 30%, gradually rising to 50% by the contract’s conclusion.

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