In 2022, total mining production will increase by 8.2%. Although Botswana is the largest producer of diamonds on the continent, the increase in copper and coal this year will not make up for the fall in this commodity.
About the majority of Botswana’s diamonds are produced by Debswana, a joint venture between the Botswana government and De Beers, a division of Anglo American Plc (AAL.L). By 2022, production will increase by 8% to 24.1 million carats. Trade in diamonds rose 41% last year, Botswana also benefited from Western consumers avoiding Russian stones as a result of the Ukraine invasion.
Botswana expects that diamond production will decrease by 1% in 2023 and diamond trade growth will decrease to 7% from 41% in 2018.
Botswana’s finance ministry’s senior policy adviser, Keith Jefferis, expressed similar sentiments in a statement to the American news agency, Reuters. He noted that the diamond trade will face a major setback during the year, due to a decline in consumer demand, particularly in the US.
He said, “We see the diamond sector having a difficult few years due to a decline in consumer demand especially in the US, due to pressure on real incomes and consumption.”
High demand for coal and anticipated increases in copper mine production will offset this. The Motheo copper mine, owned by Sandfire Resources ( SFR.AX ), is scheduled to start operations this year, while the Khoemacau Kalahari Copperbelt mine is ramping up production to a nominal capacity of 60,000 tonnes a year.
Botswana’s two active coal mines—state-owned Morupule and Minergy’s ( MIN.BT ) Masama mine—saw record exports in 2017 and are now considering increasing output to meet the country’s high international demand for coal.
According to estimates from the finance ministry, the government expects mining royalties to drop from 6.1 billion pula ($3.41 billion) last year to 4.5 billion pula ($3.41 billion) in 2023. The amount of dividends to be paid to the state is also will decrease, from 15 billion to 11.3 billion pesos, in 2022.