Jewel of denial: Botswana’s diamond dilemma
The country owes its fortunes to the promise that ‘diamonds are forever’. But in the current market slump, suggests that forever may have already come and gone.
Keletso Thobega in Gaborone
This is a great time for Lucara Diamonds, which owns Karowe mine in Botswana – at least according to news headlines. But if you read the fine print of its corporate filings, the end is nigh.
Last week, Belgian diamond-cutting company HB Antwerp announced it had received a 37.4-carat pink diamond from Karowe mine to cut and polish. The stone might be “one of the most important pink diamonds ever cut”, HB Antwerp co-founder, Oded Mansori, told reporters.
Lucara Diamonds made two other big finds in Karowe in 2024: a massive 2,492-carat diamond in August – the second largest ever found – and a 1,094-carat diamond a month later.
But buried in Lucara’s quarterly corporate filings, which were published a month ago, was a formal warning about the next 12 months. “The company estimates that its working capital as at 30 June 2025, cash flow from operations, and other committed sources of liquidity will not be sufficient to meet its obligations, commitments, and planned expenditures,” the directors wrote. “These conditions cast doubt on the company’s ability to continue as a going concern.”
The collapse of Botswana’s diamond industry has long been predicted. Analysis of mining companies’ latest corporate filings by The Continent and Finance Uncovered indicates that collapse is no longer abstract.
Lucara’s numbers plunged from a profit of $40-million in 2022 to a $20-million loss in 2023. The going-concern warning suggests that the two big finds of 2024 were not enough of a reprieve, even though they brought it back to profitability in 2024.
De Beers, Botswana’s most important multinational partner and the world’s biggest diamond producer, is also teetering. The company’s core operations lost $189-million in the first half of 2025, as it spent far more than it earned from its main business activities. De Beers is holding unsold stock of $1.8-billion. The $500-million in diamond inventories that its parent group has sold this year so far went for below-cost prices, according to trade publication MiningMx. Revenue from Debswana, a joint venture between De Beers and Botswana’s government, fell 52% in just two years.
In diamond-mining towns, the slump is already beginning to draw blood.
Debswana cut production 27% in 2024 and began a voluntary retrenchment scheme. Since December, 600 (of 4,000) workers have left. More job losses are expected by the year’s end: a geologist working for its Letlhakane mine said workers had received letters notifying them of impending retrenchments.
According to Mbiganyi Gaekgotswe, the secretary-general of Botswana Mine Workers Union, some workers’ salaries have gone unpaid because of the slump and many are suffering from stress, anxiety and reduced morale. He has called for better social protections for workers, including secure terminal benefits and retraining for workers who are let go. Further retrenchments, he insists, must be the last resort.
The sunken places
Jwaneng in southern Botswana is home to the world’s most productive diamond mine. About 40% of De Beers’s supply comes from this town, where water is salty and unpotable and the streets are narrow, pothole-strewn, and often have no traffic signs or night lighting.
People from all over southern Africa have come to seek jobs in Jwaneng since 1982 when De Beers set up an open-pit mine. But now the town is starting to look ghostly. On its streets, many former miners – identifiable by their ashen skin – have turned to roadside trade.
Agang Phuti once worked for Debswana but now sells used clothing and snacks by the roadside. “The little we make goes towards survival,” she says. “It’s a struggle.”
Local contractor Onalenna Senwelo’s company is struggling after its electrical works contract at Letlhakane mine was terminated in November. “My business partner and I were gutted,” he says.
Even those who still have jobs are apprehensive.
“I don’t know what will happen if demand keeps falling. I just hope the industry will bounce back,” says Mercy Ketlogetswe. She operates a 300-tonne long-haul dump-truck for Debswana.
For Ketlogetswe, who was once a bottle-store cashier, landing this job was a dream come true. She began at Debswana as a contract worker before applying to be one of 200 women trained to operate heavy machinery. “It changed my life … I can take care of myself and my family,” she says. Whether she will continue to be able to do so depends on the global diamonds market.
The situation is no different in the mining towns of central Botswana, including Orapa and Letlhakane.
Laone Mbangiwa, who has been living off miscellaneous mining contracts in Letlhakane, is considering leaving in search of greener pastures. “Things are not as they used to be … Many people have been coerced into resigning and others fear losing their jobs,” she says.
The end of the affair
This could be a bad hangover, a long slump, or the end of “forever” for diamonds – but the difference may not matter in Botswana.
One reason the current slump looks so dramatic is because 2022 was a boom year for the industry, according to mining historian Duncan Money. “There was huge demand from consumers after the pandemic and diamond prices soared, hitting a peak in 2022 of almost 40% above pre-pandemic levels.”
From this historic high, the dive could be a return to more normal demand levels. But lab-made diamonds are eating into that demand, creating a longer-term headache for the industry and Botswana.
Synthetic stones made up almost half of engagement ring sales in the United States last year, up from just 5% in 2019. They are 80% to 90% cheaper than natural stones. Unlike oil, which often rebounds, diamond prices may not.
“The appeal of diamonds was always partly based on scarcity. And now they are no longer scarce,” says Money.
And Botswana’s economy is not positioned to weather a long recession in that industry.
In recent years, diamonds still accounted for nearly a third of government revenue, 80% of export earnings, and up to a quarter of GDP.
It is Africa’s richest country per capita but Botswana is now facing its worst fiscal and social crisis in decades.
The International Monetary Fund expects Botswana’s economy to contract 0.4% this year, Reuters reports. Finance minister Ndaba Gaolathe has warned that the government will spend 7.5% more than it earns.
A senior finance official admitted that liquidity is drying up and the government is “sitting on unpaid invoices”. National debt is expected to double to 43% of GDP.
The social impact is already showing: President Duma Boko has declared a public-health emergency because hospitals are short of both drugs and equipment. Aid cuts have not helped.
One last throw of the dice
In response, Botswana is trying to take tighter control of its diamonds. The government owns 15% of De Beers, but has now hired a Swiss bank and a British advisory firm to advise it on whether it should buy majority ownership. Anglo American, the majority owner of De Beers, said last year that it was breaking up and selling most of its parts, including the diamond producer.
Buying Anglo American’s stake in De Beers would be a bold gamble for Botswana. It would claw back sovereignty over the resource that once powered its prosperity – the same resource that now threatens to sink Botswana’s economy.
Gaborone’s calculation would be that the market is in a long slump rather than a final collapse. Therein lies the gamble.
Once celebrated as an economic success story for turning its most valuable resource into development, Botswana now risks becoming a cautionary tale about the perils of resource dependence.