Botswana Diamonds PLC – The Diamond Certification Laboratory of Australia (DCLA)

Botswana aims to negotiate bigger stake in HB Antwerp diamond dealer

Botswana intends to renegotiate its proposed purchase of a stake in Belgian gem dealer HB Antwerp to double the size of its shareholding at no extra cost following the downturn in the diamond market, the country’s mines minister said on Tuesday.

Botswana is the world’s biggest diamond producer by value, meaning its economy has been disproportionately hit by a drop in demand for diamonds caused by a global economic slowdown.

Lefoko Moagi told Parliament the weaker diamond market had also affected the company’s valuation, giving the country room to renegotiate.

“We will not be injecting more capital, but we will get more shares for the same amount proposed in 2023,” Moagi said. “Instead of the 24%, we will negotiate to get 49.9% for the same amount initially proposed.”

Finance ministry budget documents showed in February that the country had set aside 890 million pula ($65.95 million) for the 24% stake, valuing the Belgian company at about $275-million.

The HB Antwerp deal was announced during Botswana’s negotiations for a new sales contract with Anglo American’s diamond unit De Beers in March 2023.

As Botswana sought to increase its power to market its stones outside a decades-old agreement with De Beers, it said the HB Antwerp deal would strengthen its presence in the downstream diamond industry.

It includes supplying the trader with rough diamonds for five years through the state-owned Okavango Diamond Company (ODC).

Source: miningweekly

Botswana’s diamond market suffers major blow as sales drop by 49% in first half of 2024

Anglo American cut its diamond production by 19% in the first six months of the year.

According to Botswana’s central bank data, sales of rough diamonds at Debswana Diamond Company fell by 49.2%, amounting to $1.29 billion compared to $2.54 billion in the same period last year.

In local currency, sales of rough diamonds decreased by 47.3% to 17.555 billion pula compared to the same period last year.

This decline in sales is a major blow to the South African nation, which derives 30%-40% of its revenue, 75% of its foreign exchange earnings, and a third of its national output from sales of rough diamonds.

The report highlighted the downturn in the global diamond market as the primary reason for this sharp decline.

In response to the weak consumer demand, Anglo American cut its diamond production by 19% in the first six months of the year.

The report highlighted the downturn in the global diamond market as the primary reason for this sharp decline.

Botswana derives 30%-40% of its revenue, 75% of its foreign exchange earnings, and a third of its national output from sales of rough diamonds.

The Debswana Diamond Company is a joint venture between the government of Botswana and Anglo American Plc’s De Beers. Anglo American Plc’s De Beers sells 75% of its output to De Beers, while the balance is taken up by the state-owned Okavango Diamond Company.

Despite the current economic challenges, Botswana and De Beers signed a ten-year diamond sales agreement in June.

This deal will gradually see the share of Debswana’s output sold by the state-owned company increase from 25% to 30% before it goes up to 40% in five years and eventually 50% by the end of the new contract.

According to the key points in the agreement, this strategic move aims to boost Botswana’s revenue from its diamond resources.

Source: africa.businessinsider

De Beers Rough Production Down 15%

*Debswana Jwaneng Diamond mine, Botswana, South Africa*

De Beers reported a 15 per cent drop in its global diamond production in Q2, as demand remained weak for yet another quarter.

The H1 figure (16.5m carats) is down 19 per cent on the same period in 2023.

The total number of carats recovered during Q2 2024 was 6.4m, down from 7.6m year-on-year. Botswana, which accounts for around two thirds all De Beers’ production, was worst hit, with output down 19 per cent.

De Beers blamed “intentional lower production from short-term changes in plant feed mix at Jwaneng to process existing surface stockpiles”.

Jwaneng, De Beers’ biggest deposit saw output drop 36 per cent during the quarter, from 2.5m carats to 1.9m.

Production in Namibia was down 8 per cent, Canada slipped 1 per cent and South Africa increased by 8 per cent.

In its Production Report for the Second Quarter of 2024, De Beers said guidance for the year remained unchanged at 26m-29m carats.

But parent company Anglo American has indicated that production for the year (originally given as 29m-32m carats) could well be further reduced to manage working capital and preserve cash in a weak market.

Source: Idex

Botswana GDP shrinks most since 2020 as diamond output plunges

Botswana’s economy contracted by the most since the peak of the pandemic in early 2020, after diamond production plunged.

Gross domestic product shrank an annual 5.3% in the first quarter, compared with growth of 1.9% in the prior three months.

The downturn was primarily influenced by a decrease in real value added of the diamond traders and mining & quarrying industries of 46.8% and 24.8% respectively, Statistics Botswana said in a report Friday.

Botswana is the world’s largest producer of rough diamonds by value, with the revenues making up the bulk of the southern African country’s budget receipts. The decline is likely to make meeting its fiscal targets for this year difficult. The central bank already warned last week that the government would probably miss its economic growth forecast of 4.2% because of weaker mining output.

The global diamond industry almost came to a standstill in the second half of last year as De Beers and Russia’s Alrosa PJSC — the two biggest miners — all but stopped supplies in a desperate attempt to stem a slump in prices. That hit earnings at De Beers, which mines more than three-quarters of its diamonds in Botswana.

Earlier this year De Beers said it expects any recovery in the beleaguered diamond market to be slow and gradual as the industry continues to suffer from weak economic growth in key markets such as China and the US.

Source: Mining.com

Botswana may raise De Beers stake as Anglo weighs spin-off

The Botswana government may raise its shareholding in global diamond miner De Beers, President Mokgweetsi Masisi told JCK News, after parent company Anglo American said it plans to spin off or sell the business.

The government owns a 15% stake in De Beers and Botswana accounts for 70% of the company’s annual rough diamond supply.

Anglo outlined a radical review of its business including a sale or divestment of the diamond business to focus on copper, iron ore and a fertilizer project in the UK to fend off a takeover from bigger rival BHP Group.

Masisi told JCK in Las Vegas that Anglo’s sale of De Beers would be “the best thing” if it happens.

The government could raise its shareholding in De Beers “if it’s attractive to,” Masisi told the online diamond news channel. The president in May told CNBC Africa that government would defend its interests in the diamond miner.

Among the plans Anglo could consider is an initial public offering for the diamond business, Reuters reported on May 14, citing sources.

Like other luxury goods, diamond prices have been hammered by a slump in global demand. De Beers has been limiting supply and offering flexibility to contracted customers. In February, Anglo announced a $1.6 billion impairment charge on De Beers. Anglo acquired De Beers in 2011, buying the Oppenheimer family’s 40% stake for $5.1 billion.

Masisi told JCK News Botswana’s ideal partner in De Beers would be a long-term investor. The government will try to keep the “bad guys out” and wants investors whose vision is aligned with the government’s.

“One of the characteristics of a bad owner is someone who has impatient capital,” Masisi said. “This industry requires somebody who is in it for the long-haul, because it has its ups and downs.”

Source: Mining.com

Botswana Diamonds expands its land holdings in the Kalahari

Diamond exploration company Botswana Diamonds has been granted four prospecting licences – covering just under 2 332 km2 – in the Kalahari of Botswana.

The prospecting licences are in the same general area as Gem Diamonds’ Ghaghoo mine, as well as Botswana Diamonds’ own KX36 project.

“I am pleased that we have been awarded these prospecting licences in the Kalahari of Botswana, which we believe will be the next major diamond-producing area in the country.

“Exploration is a long game, particularly diamond exploration, and we believe the industry is going through a structural change which will see the natural product, particularly from Botswana, find its premium niche in world markets,” chairperson John Teeling comments.

Source: Miningweekly

Good news for Botswana Diamonds

Botswana Diamonds has announced that a gravity survey has been completed over four high-grade geophysical targets that had good magnetic response in a previous survey undertaken by the company.

“Preliminary results from this gravity survey show that at least one of the four targets, which is located 6 km south of the existing KX36 diamond discovery, has an excellent gravity response like that of known kimberlites and similar in size to KX36. The survey on the KX36 size anomaly is being repeated and correlated with previous results for confirmation. Next steps will be a drilling plan.

The new kimberlites targets have great potential to upgrade the existing resources in the area, including at the Ghaghoo Mine, which is currently under care and maintenance and only 60 km away from the KX36 project.

The KX36 project is a 3.5 ha kimberlite pipe in the Kalahari. The pipe has resources of 17.9 Mt at 35 cpht and 6.7 Mt at 36 cpht at $65 /ct. The modelled grade range is 57-76 cpht at an estimated diamond value of up to $107/ct.

Botswana Diamonds Chairman, John Teeling, commented: “This is the first strong indication of additional kimberlites around the KX36 discovery. Kimberlites come in clusters, but extensive exploration has to date not been successful.

“The anomaly has a strong gravity signature which gives us confidence that when drilled, it will prove to be a kimberlite. The anomaly sits on a structure like all the other kimberlites in the Kalahari, which further increases confidence. It is early days but very good news”.

Source: miningreview

HB Antwerp Invests in Botswana’s Young Diamond Talent

HB Antwerp has announced a partnership with Botswana to foster a new generation of diamond talent.

It has signed a a five-year memorandum of understanding with the Botswana International University of Science and Technology (BIUST).

They will jointly organize traineeships for Botswanan youth, offer scholarships for promising local talent, drive innovative projects backed by digital supply chains, and create job opportunities in the diamond sector.

The move comes as Botswana threatens to walk away from its long-standing sales agreement with De Beers, which is due for renewal at the end of June.

There has been media speculation that the Okavango Diamond Company (ODC), wholly owned by the Botswana government, was planning to sell its specials (+10.8-carats) to Belgian manufacturer HB Antwerp and to Canada-based Lucara and instead of De Beers.

HB Antwerp says it promotes respect for local communities, fair labor and pay, and investment in skills training and job placement opportunities for local workers.

Rafael Papismedov, its managing partner and strategy director, said: “Young people in Africa have incredible potential, but often do not have access to meaningful opportunities.

“We believe in the power of diamonds to catalyze positive change and look forward to leveraging this partnership to deliver on that potential for the Botswanan people.”

Source: idexonline

Botswana’s diamond trade is expected to depreciate due to reduced demand

Botswana’s finance ministry disclosed that the diamond trade in Botswana is set to fall back in 2023, due to reduced demand.
This is as opposed to 2022 when Botswana’s total mining production increased by 8.2%.
Botswana anticipates that the production of diamonds would fall by 1% in 2023, and growth in the diamond trade will decrease to 7%.
An official from Botswana’s finance ministry stated on Wednesday that Botswana anticipates its mining sector’s production to remain flat this year as the diamond business loses its luster as a result of a decline in consumer spending and reduced demand for diamond jewelry.

In 2022, the total mining production increased by 8.2%. Although Botswana is the continent’s biggest producer of diamonds, this year’s improvements in copper and coal will not make up for the fall in this commodity.

About the majority of Botswana’s diamonds are produced by Debswana, a joint venture between the government of Botswana and De Beers, a division of Anglo American Plc (AAL.L). In 2022, production increased by 8% to 24.1 million carats.

Trading in diamonds increased 41% in the last year, with Botswana also benefiting from Western consumers avoiding Russian stones as a result of its invasion of Ukraine.

Botswana anticipates that the production of diamonds would fall by 1% in 2023 and that growth in the diamond trade will decrease to 7% from 41% in 2018.

Botswana’s finance ministry senior policy advisor, Keith Jefferis expressed the same sentiments in a statement to the American-based news agency, Reuters.

He noted that the diamond trade would face a major setback during the year, due to a slowdown in consumer demand, particularly in the USA.

He stated, “We see the diamond sector having a bit of a tough year due to an expected slowdown in consumer demand particularly in the USA, because of pressure on real income and consumption.”

High demand for coal and anticipated increases in copper mine production will somewhat offset this.

The Motheo copper mine, owned by Sandfire Resources (SFR.AX), is scheduled to begin operations this year, while the Kalahari Copperbelt’s Khoemacau copper mine is ramping up production to reach its nominal capacity of 60,000 tonnes annually.

The two active coal mines in Botswana the state-owned Morupule and Minergy’s (MIN.BT) Masama mine saw record exports in 2017 and are now considering increasing output to keep up with the country’s high demand for coal internationally.

According to forecasts from the finance ministry, the government anticipates mining royalties to decrease from 6.1 billion pula ($3.41 billion) last year to 4,5 billion pula ($3.41 billion) in 2023. The amount of dividends owed to the state would likewise decrease, from 15 billion to 11,3 billion pesos, in 2022.

Source: africa.businessinsider

Botswana Has the World’s Two Richest Diamond Mines

A new list names the Jwaneng diamond mine, in Botswana, as the world’s richest diamond mine.

A new list by miningintelligence.com, quoted by IDEX Online, names the Jwaneng diamond mine, in Botswana, as the world’s richest diamond mine for the first three quarters of 2022. Jwaneng produced 10.3 million carats in 2022.

Orapa, also in Botswana, came second with 8 million carats. Both Jwaneng and Orapa are operated by Debswana, a partnership between De Beers and the government of Botswana. Jwaneng and Orapa were also listed as the two highest value diamond mines in the world, estimated at $1.25 billion and $976 million respectively, “based on average historic annualized prices of $121.5 per carat,” according to the report.

Alrrosa’s Udachny mine came third. Although Alrosa has not published production figures since the war with Ukraine, miningintelligence.com bases its conclusion on the mine’s 2021 production of 4.6 million carats. Fourth comes the Venetia mine in South Africa 4.6m carats, operated by De Beers. In fifth is Nyurba, in Russia, with 3.6 million carats, based on 2021 numbers.

Source: israelidiamond