Botswana’s government signed on Tuesday a long-delayed diamond mining and sales agreement with Anglo American unit De Beers, the world’s leading diamond producer by value.
As part of the deal, Botswana’s share of the diamonds produced by Debswana, a 50-50 joint venture between the country’s government and De Beers, will increase from 25% to 50%. Botswana will receive 10 billion pula ($712 million) in development funding, in line with a provisional 10-year arrangement reached in 2023.
The agreement, in negotiations since 2018, also extends the mining licenses for Debswana until 2054. Previously, the licenses were set to expire in 2029.
The signing of the contract had stalled under former President Mokgweetsi Masisi but was prioritized by President Duma Boko, who took office last October.
Botswana, the world’s largest producer of rough diamonds by value, depends on the sector for the bulk of its national revenue. President Boko, however, has voiced concerns that the industry is not generating enough employment opportunities.
While Debswana’s diamond production accounts for 80% of Botswana’s exports, the country has struggled to diversify beyond mining. Despite a relatively high annual per capita income of $7,820 — exceeding that of oil-rich Gabon and South Africa, the continent’s biggest economy—job creation remains limited.
The deal comes at a crucial time for De Beers, as its parent company, Anglo American, considers spinning out the diamond business through a sale or initial public offering. Analysts warn that weak global diamond prices could complicate such a move.
Botswana remains integral to De Beers’ operations, supplying 70% of its annual rough diamonds. The government also holds a 15% stake in De Beers, underscoring the long-standing strategic partnership between the two parties.
Canada’s Lucara Diamond achieved record-breaking production in 2024, highlighted by the recovery of two exceptional stones at its prolific Karowe mine in Botswana.
The miner increased its processed ore to 2.9 million tonnes last year, up from 2.8 million tonnes in 2023. It also set a new milestone with the recovery of 807 “specials”—diamonds larger than 10.8 carats—compared to 602 in the previous year. These accounted for 7.6% of the total recovered carats, up from 5.3% in 2023.
The two most important diamonds recovered last year were the 2,488-carat Motswedi and the 1,094-carat Seriti diamonds, both unearthed at Karowe.
Motswedi, found in August, is the largest diamond recovered in the last century. Its name means “water spring” in the local Setswana language, symbolizing underground water surfacing to bring life and vitality.
The Seriti stone, unearthed in September, translates to “aura” or “presence”, reflecting cultural identity and legacy.
Lucara’s discoveries have continued this year, with the recovery of a1,476-carat non-gem diamond in January.
Revenue jump The company sold 399,215 carats in 2024, generating $203.9 million in revenue — an 18% increase from $172.4 million the previous year.
“Our world-class Karowe mine continues to set new benchmarks,” CEO William Lamb said in a news release. “The open-pit operations delivered yet another remarkable milestone with the recovery of our seventh 1,000+ carat diamond.”
Lamb also highlighted steady progress on Karowe’s underground expansion, with shaft sinking marking a major step forward. The project is expected to begin commercial production in early 2028.
Since it began operations, Karowe has yielded some of the world’s most remarkable diamonds, including the 1,758-carat Sewelô in 2019, the 1,109-carat Lesedi La Rona in 2015, and the 813-carat Constellation, also in 2015.
Karowe is also credited for having yielded Botswana’s largest fancy pink diamond to date, the Boitumelo.
The mine remains one of the world’s highest-margin diamond mines, producing an average of 300,000 high-value carats each year.
The world’s biggest diamond miner, De Beers, cost its parent company almost $3bn last year as the growth in lab-grown stones continues to take the shine off the industry.
Anglo American was forced to write down the value of the renowned gem producer for a second consecutive year as its chief executive admitted the diamond markets had proved “really, really difficult for the company”.
Duncan Wanblad, the chief executive of Anglo American, added that its plan to shrug off De Beers as part of a radical strategy to dismantle parts of the 108-year-old group – which coined the slogan “a diamond is forever” in 1947 – may be delayed.
He added that the FTSE 100 company did not expect “much traction or progress” on its plans to spin off De Beers in the first half of the year, which could be via a trade sale or a listing via an IPO or demerger, but it might “pick up” towards the end of the year.
Diamond prices have slumped over the past decade because of the rising popularity of cheaper, lab-grown versions and a slowdown in consumer spending in China.
In response, Anglo has taken impairments of $2.9bn on De Beers last year, after a $1.6bn writedown of the company in its annual results last year. This drove Anglo to a $3.1bn net loss in 2024, from a $283m profit the previous year.
The latest writedown of De Beers, which once controlled 90% of the world’s diamond market, means the company is now valued at $4bn.
Anglo laid bare the ongoing losses at De Beers after setting out a plan last year to sell the diamond business as part of a historic corporate overhaul to defend the company against a £34bn takeover plot by the Australian miner BHP.
Anglo hopes to guard the company against further unsolicited advances from BHP, which attempted to force the board to offload two Johannesburg-listed subsidiaries, the platinum miner Amplats and the iron ore miner Kumba, in order to complete a takeover.
Wanblad said the company had received unsolicited interest in the diamond business but a formal process had not started. At least part of the company is expected to be purchased by the government of Botswana, which hosts many of the company’s diamond mines.
Anglo American’s troubled ownership of the De Beers group was brought into fresh focus on Thursday as the mining company announced a fresh multibillion-dollar write-down of the diamond group it’s trying to restructure.
De Beers, which nearly 80 years ago introduced the masses to the immortal phrase “A diamond is forever,” has lost its shine in recent years amid declining demand for diamonds, partly a result of the growth of cheaper, allegedly more sustainable lab-grown alternatives, and also from declining demand in its crucial Chinese market.
Anglo announced a $2.9 billion write-down in the value of De Beers as part of its 2024 annual results on Thursday. It was the second valuation reduction in two years, after a $1.6 billion write-down in its 2023 earnings.
De Beers now has a book value of around $4 billion, meaning the company has more than halved from a 2023 valuation of $8.5 billion. The current valuation includes a $2 billion stockpile of diamonds it has struggled to shift amid the downturn in the industry.
“It’s been a bad year for rough diamond sales,” De Beers CEO Al Cook told the FT in December.
Lab-grown diamonds and Chinese issues Duncan Wanblad, Anglo’s CEO, described the 2024 trading conditions for rough diamonds as “extremely challenging,” citing high midstream inventory levels and depressed demand in China for a steep drop in sales in the second half of the year. Anglo expects to remove 10 million carats from planned production this year, after removing 6 million in 2024.
De Beers has faced an identity crisis amid a drop-off in demand for authentic diamonds. That has partly been driven by brewing demand for lab-grown diamonds.
The group entered the lab-grown business in 2018, aiming for sustainability-minded customers. However, that proposition aligned with their relative affordability has caused the product to cannibalize some of De Beers’ customers, and it exited that market in 2024.
Wanblad said the lab-grown headwinds were surmountable. John Heasely, Anglo American’s finance director, suggested the expected continued decline in prices for lab-grown diamonds would continue to bifurcate the two markets, reducing the chance of lab-grown diamonds cannibalizing the genuine market.
In China, which has reduced the cumulative demand for diamonds by 40% in the last two years, Heasley noted changing behavior among retailers was adding to its inventory headaches.
The finance director said retailers in the country had started selling their polished diamonds back into the midstream market to recoup some of their expenditure. This led midstream inventories to spike in the first half of 2024, keeping the company’s rough diamond inventory fixed.
Anglo restructures De Beers Anglo has sought to restructure De Beers into an independent operation, which could result in either a sale or an IPO of the diamond company.
However, this restructuring has been delayed owing to myriad industrial headwinds the company has faced.
Wanblad said of De Beers: “I’m really not expecting much traction or progress in the first half of this year.”
Wanblad says it has agreed a framework with the Botswana government, which is a 15% owner in De Beers, to help it potentially initiate a formal sale process after receiving several “unsolicited inbounds” for the diamond company.
Chinese scientists synthesized an artificial “super diamond” that is 40% harder and far more durable than natural diamonds. The findings of the research team were published in early February in the journal Nature Materials.
Led by Liu Bingbing and Yao Mingguang from Jilin University, the researchers discovered that by heating highly compressed graphite, it can transform into a hexagonal diamond. This synthetic creation possesses a hexagonal crystal form, which provides much greater strength compared to the cubic structure of most natural diamonds. The “super diamond” structure exhibits high thermal stability up to 1,100°C and a very high hardness of 155 Giga Pascals (GPa), according to the scientists.
“Our findings offer valuable insights regarding the graphite-to-diamond conversion under elevated pressure and temperature, providing opportunities for the fabrication and applications of this unique material,” the scientists wrote in the study.
Independent mining group Petra Diamonds, which owns and operates diamond mines in South Africa, has appointed two interim CEOs Vivek Gadodia and Juan Kemp to succeed Richard Duffy, who has resigned by mutual agreement and with immediate effect.
Gadodia will oversee all corporate matters of the group, while Kemp will oversee all operational matters.
At this point, they will not be appointed as directors.
Vivek joined Petra in 2021 with his roles having included planning and corporate planning executive and chief restructuring officer. He previously worked for Sasol in various engineering, project management and corporate positions over a 15-year period.
Kemp, meanwhile, joined Petra in 2009 when the company bought its flagship Cullinan mine from fellow miner De Beers.
Kemp was GM of the mine since 2011 before having been appointed as a chief technical officer in 2019 and operations executive for the Cullinan mine in 2024.
His earlier career included positions at De Beers and AngloGold Ashanti.
The appointments of the interim CEOs come as Petra struggles with lower earnings generation and high debt.
The company’s results for the six months ended December 31, 2024, reflect Petra’s progress in implementing cost reduction plans and smoothed capital profiles, despite weakness in the diamond market.
Petra managed to reduce its mining and processing costs from continuing operations by 19% year-on-year to $98-million.
However, the group’s revenue was also lower by 30% year-on-year, or $49-million, at $115-million owing to additional revenue of $50-million having been carried over from tenders into the prior comparable period.
Adjusted earnings before interest, taxes, depreciation and amortisation amounted to $15-million, which was lower than the $38-million adjusted Ebitda reported in the first half of the prior financial year.
The company’s basic loss a share from continuing operations was $0.30, or $0.13 on an adjusted basis.
Operational free cash inflow of $16-million in the six months under review compares with a $21-million outflow in the first half of the prior year, which Petra says largely reflects the impact of its cost reduction measures, capital smoothing and working capital management.
The lower revenue and earnings over the financial year of 2024, caused Petra to not meet its required leverage and interest cover covenant ratios in its revolving credit facility measured at December 31, 2024.
Petra has since obtained a waiver from the lender, Absa Bank, related to these covenant breaches, and is restarting engagements with lenders regarding the refinancing of its debt.
The group’s consolidated net debt was $215-million as at December 31, compared with $193-million at the end of June, owing to diamond market weakness and the timing of Petra’s tender sales.
Three tender sales took place during the first half of the 2025 financial year (the six months ended December 31), while four have been scheduled for the remainder of the financial year.
Petra realised an average price of $103/ct in the reporting period, which reflects the positive impact of product mix over the period offsetting the overall weaker diamond pricing environment.
OPERATIONS
The group has achieved cost reductions through sustainably lowering overheads and on-mine cost optimisation with limited impact to its operations.
Petra completed the sale of its interest in the Koffiefontein mine to the Stargems Group in the six months under review, which allowed the group to avoid closure-related costs of $23-million.
Petra also entered into an agreement in January to sell its interest in the Williamson mine, in Tanzania, to Pink Diamonds Investments for a headline consideration of $16-million.
The group expects the sale of its interest in the Williamson mine to be completed by the end of the calendar year.
The Finsch mine has transitioned into new production areas called 78-Level Phase 2, with steady operations having been reported over the past few months.
In turn, production from the CC1E zone at the Cullinan mine has also started in the interim period, while Petra continues to advance more extension projects at both of these mines, as well as life-of-mine plan reviews.
Petra intends to re-engage its lenders with a revised business plan and updated cost-savings initiatives, as part of its overall restructuring plan.
The group is targeting net free cashflow generation for the remainder of the financial year, as well as more efforts to make the company resilient to pricing weakness.
Botswana’s central bank left its main lending rate unchanged on Thursday, saying the economy was expected to operate below capacity and not generate demand-driven inflationary pressures because of a slump in the global diamond market.
The Bank of Botswana held its Monetary Policy Rate at 1.90% for the second policy meeting in a row. The rate is based on a seven-day instrument.
“The economy will contract this year primarily due to the downturn in the global diamond market and moderately recover next year,” central bank Governor Cornelius Dekop told a news conference.
The southern African country’s economy is largely dependent on the export of diamonds, and declining earnings from the precious stone have limited government spending.
The central bank also lowered its primary reserve requirement to 0% from 2.5% due to significantly reduced liquidity in the banking system.
Dekop said inflation was expected to average 2.9% in 2024 and 3.3% in 2025, compared with forecasts of 2.8% and 3.1% given at the bank’s previous monetary policy meeting in November.
The Bank of Botswana prefers inflation between 3% and 6% over the medium term. Annual inflation stood at 1.6% in October.
The average price of a natural diamond engagement ring in the US last year was $6,750.
And the average size of the stone was 1.07 carats, according to a new report by the New York-based Natural Diamond Council.
It provides a detailed analysis of the shift to larger, higher quality diamonds in its downloadable 20-page Natural Diamond Trends: A 2024 Overview.
Round brilliants remain by far the most popular shapes in diamond jewelry, at 81.7 per cent, but that figure is slipping slightly.
Among fancy shapes for all diamond jewelry, princess and cushion showed the biggest increases, albeit from a very low base (2.1 per cent and 1.0 per cent market share respectively).
The most common color for an engagement diamond was H and the most common clarity was SI1, with bridal representing 33 per cent of all natural diamond sales in the US.
The average price of wedding sets increased 31 per cent in 2024, the report said.
“The increase was mainly due to a rise in the average size of diamonds and a notable change in the type of metal used.”
The average price of natural diamond jewelry sold across all product categories grew 2.7% to $2,360 in 2024.
The report, the latest in a series uncovering the trends, origins and impacts of natural diamonds, was jointly produced with Tenoris.
The diamond industry is undergoing a seismic shift, driven by the rising popularity of lab-grown diamonds. Once considered a niche alternative, these scientifically engineered gems are now mainstream, offering a more affordable and ethically sourced option compared to their natural counterparts. This surge in demand is putting pressure on the traditional diamond market, challenging industry norms and reshaping consumer preferences.
Lab-Grown Diamonds and Their Impact on the Industry
Lab-grown diamonds are chemically, physically, and optically identical to natural diamonds. They are created using advanced technological processes that replicate the conditions under which diamonds form in the Earth’s mantle. As a result, they offer the same brilliance, hardness, and durability as mined diamonds, but at a significantly lower price point.
With consumers becoming more conscious of sustainability and ethical sourcing, lab-grown diamonds are increasingly seen as a viable alternative to mined stones. This shift in preference is sending shock waves through the traditional precious gems market, compelling industry players to adapt to evolving trends.
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Diamond miner Lucara Diamond Corp has sold the 549 ct Sethunya and the 1 080 ct Eva Star diamonds, recovered at its Karowe mine, in Botswana, for $54-million.
The Sethunya, recovered in 2021, and the Eva Star, discovered in 2023, showcase the remarkable quality and size of diamonds consistently produced from the South Lobe of the Karowe kimberlite. These exceptional stones underscore Karowe’s position as one of the world’s most prolific sources of large, high-value diamonds, Lucara states.
“The sale of these two extraordinary diamonds further validates our investment in the Karowe underground project. The unique characteristics of Karowe’s kimberlite, particularly in the South Lobe, continue to amaze us with its ability to produce diamonds of exceptional size and quality. The mineralogy we’re seeing is truly unprecedented in the industry, consistently delivering Type IIa diamonds of remarkable clarity and size,” adds president and CEO William Lamb.
The Karowe mine has yielded some of the world’s largest diamonds, including the 1 758 ct Sewelô, recovered in 2019; a 1 174 ct diamond recovered in 2021; and the 1 109 ct Lesedi La Rona, recovered in 2015.
The 1 080 ct Eva Star diamond was the fourth diamond weighing more than 1 000 ct to be recovered at the mine.
This was followed by the recovery of the 2 492 ct Motswedi diamond in August last year and the 1 094 ct Seriti diamond in September last year.
The 2 492 ct Motswedi is the second-largest diamond ever to be recovered, with the largest being the 3 106 ct Cullinan diamond recovered in South Africa in 1905.
The Karowe underground expansion project will extend the mine’s life beyond 2040 and has been designed to access the parts of the South lobe at depth where the EMPKS ore type is prevalent.
Production at the underground mine is scheduled to start in the first half of 2028.