On Wednesday, a finance ministry official said Botswana anticipates mining sector production to remain flat this year as the diamond industry loses its glitter owing to consumer spending cuts and reduced demand for diamond jewelry.
In 2022 mining production grew by 8.2%. However, this year, Botswana, Africa’s top diamond producer, will lose diamonds despite improvements in copper and coal.
Debswana, a joint venture between Botswana’s government and Anglo American Plc’s (AAL.L) De Beers, produced 24.1 million carats in 2022. Botswana’s diamond trade increased by 41% as Western purchasers shunned Russian stones after Moscow invaded Ukraine.
Botswana forecasts that diamond output will drop 1% and trading growth will decrease to 7% from 41% in 2023.
“We see the diamond industry having a bit of a rough year due to an expected downturn in consumer demand notably in the USA, due to pressure on real income and consumption,” finance ministry senior policy advisor Keith Jefferis told Reuters.
New copper mines and coal demand will counteract this.
Khoemacau copper mine in the Kalahari Copperbelt is increasing output to 60,000 tonnes yearly, while Sandfire Resources’ (SFR.AX) Motheo will commence production this year.
Following record exports last year, Botswana’s two coal mines, state-owned Morupule and Minergy’s (MIN.BT) Masama are considering increasing production to satisfy global demand.
The finance ministry forecasts mining royalties to drop to 4,5 billion pula ($3.41 billion) in 2023 from 6.1 billion last year. State dividends would drop to 11,3 billion pula from 15 billion in 2022.
