Diamond sale fails in Botswana as buyers refuse to pay up

Botswana didn’t promote any diamonds in an unprecedented ad-hoc public sale as buyers refused to pay excessive sufficient costs, as the worldwide trade continues to grapple with certainly one of its deepest-ever crises.

State dealer Okavango Diamond Co. had provided about 1 million carats of tough stones in Thursday’s “closed” tender, which differed from the standard means of auctions being held for registered buyers and scheduled properly in advance. The purpose had been to elevate income for the federal government, Bloomberg reported folks acquainted with the matter as saying.

But no gross sales had been made as the reserve worth wasn’t met, spokesman Dennis Tlaang stated Friday. He stated Thursday that ODC wouldn’t promote at costs that may have “a negative impact on the market.”

The failed sale is but extra proof of weak spot throughout the diamond world. The trade is grappling with certainly one of its worst downturns in a long time after affected by a collapse in Chinese demand and fierce competitors from lab-grown stones, whereas US tariffs have sown additional uncertainty.

The market droop can also be a blow for the state coffers of Botswana, one of many world’s most necessary producers. Diamonds, which account for 80% of the nation’s export gross sales and round a 3rd of presidency income, have been the bedrock of its financial system for many years.

The nation’s financial system is probably going to contract for a second successive yr in 2025, in accordance to S&P Global Ratings, which just lately lower the nation’s long-term sovereign credit standing. Data launched Friday confirmed gross home product fell 5.3% in the second quarter from a yr earlier.

Along with decrease costs, Botswana has additionally confronted a decline in diamond output. Production slid 43% year-on-year in the second quarter, the most important drop because the begin of the pandemic, in accordance to Statistics Botswana. It cited extended upkeep at a key mine and efforts to stability provide with weaker demand.

Debswana, the biggest diamond miner in Botswana, has scaled again output amid the diamond droop. ODC is allotted 30% of the stones produced by Debswana, a 50-50 three way partnership between Botswana and diamond large De Beers.

ODC’s shelved sale “is not unusual in our business and in fact reflects the strength of our position in maintaining fair value for our product,” Tlaang stated. Renewed curiosity is anticipated at future auctions, he stated.