Analysis and Studies - Products analysis
The Market for Diamonds in Botswana: an insight
May 19th 2023
The market for diamonds in Botswana
Diamonds are precious stones that have been traded since ancient times and used to ornate jewelry and other objects. It is ranked among the most expensive objects worldwide, and it is the 15th most traded good representing the 0.0069% of total world trade. The first country ranked for the production of Diamonds is Russia; however, the country that has the biggest value in the trading of diamonds is the African country of Botswana. Botswana is an African country located within the southern part of the continent. Being landlocked, it borders South Africa, Namibia, Zambia, and Zimbabwe. It has always been rich in raw materials, and especially in precious metals like gold, and, of course, diamonds.
In 2019, a tennis ball-sized diamond weighing 1,758 carats was discovered in a mine in Botswana. It is of course regarded as the second-largest gem in the world by the most recent find, and it was sold for a jaw-dropping $US53 million.
Since Botswana is the world's top producer of diamonds in terms of value, the country's mining sector continues to be among the best and most profitable in the world. The drawback of this industry is that because of how closely its performance is correlated with world demand, it was severely impacted by the COVID-19 pandemic. Long-term trends have showed a fall in mineral revenues, even though this sector generates roughly one third of overall revenues and about 85% of foreign earnings. Indeed, the exports of diamonds in Botswana accounted for more than 6.85B US$ making Botswana the seventh largest diamond exporter in the world. However, Botswana is still the second largest producer of diamonds worldwide just after Russia. According to some data, Botswana produces almost 2.50 billion US$ worth of diamonds, Russia produces more than 3 billion $, and Canada 1.71B. The fastest growing export markets for Botswana are the United Arab Emirates, with $983M, followed by Belgium at $714M and India at $397M.
The decline of Botswanan market for diamonds in the last years, have shown the government’s strong dependency on the diamonds market and the urge for the state to start a big diversification on the mining industry. Indeed, Botswana is rich in other raw materials, such as copper, nickel, salt, soda ash, potash, coal, iron ore, and silver. Moreover, it is also a big exporter of beef and bovine meat. However, if we compare the data from the other exports we can see that diamonds account for more thank 6 billion US$ of revenues for the government, whereas gold, accounts for 72.9 million of US$.