Botswana’s state-owned Okavango Diamond Company (ODC) will begin selling diamonds directly to contracted buyers next month, marking a pivotal shift in the nation’s gem trade.
The move follows a new ten-year agreement between the government and De Beers, which increased ODC’s share of Debswana’s diamond production from 25% to 30%, with plans to reach 40% by the deal’s end.
For the first time, ODC is free to compete with De Beers on contract sales after restrictive clauses in the previous arrangement were removed. Managing Director Mmetla Masire said the first two sales in November would serve as pilots before full-scale operations begin.
Masire said ODC plans to sell 40% of its supply through contracts, with the rest distributed via auctions, strategic partners, and Botswana-based firms. The diversification aims to stabilise revenue streams in a diamond market grappling with declining demand and an oversupply of rough stones.
Global appetite for natural diamonds has waned amid the rise of cheaper lab-grown alternatives, sending prices tumbling. In 2023, ODC temporarily suspended rough stone sales to ease the supply glut and even withheld gems from a September auction this year to avoid further price pressure.
Masire noted that ODC’s 2024 revenues were only 60% of the previous year’s, though the company has recently achieved small profit margins after heavy losses in 2023.
Diamonds remain Botswana’s economic lifeline, generating 30% of government revenue and 75% of foreign exchange earnings. The ongoing market slump led to a 3% contraction in 2024, with the IMF projecting a further 1% decline this year.