Botswana’s state-backed rough diamond marketer, Okavango Diamond Company (ODC), is recalibrating its sales model in response to prolonged weakness in global diamond demand. The company plans to channel nearly half of its rough diamond allocation through structured contract sales, reducing reliance on volatile spot auctions and tenders.
From Auctions to Long-Term Contracts
Historically, ODC sold its entire allocation through 10 annual spot auctions and citizen tenders. However, fluctuating prices and uneven buyer participation have prompted a shift toward a more predictable revenue framework.
Pilot contract sales were launched in November, operating on a model similar to the “sight” system used by De Beers. These structured sales were introduced under Botswana’s new 10-year diamond marketing agreement with De Beers, signed in February 2025 — marking the first time ODC was permitted to adopt this approach.
Growing Allocation, Broader Customer Base
ODC receives a 30% share of rough diamond production from Debswana, the 50-50 joint venture between the Botswana government and De Beers. This allocation is set to increase over time, giving ODC greater marketing responsibility. The remaining production continues to be sold by De Beers.
According to acting Managing Director Lipalese Makepe, the initial pilot involved an average of 14 customers in November and December. That number is expected to more than double to 32 as the program expands.
Stabilising Cash Flow Through Indexed Pricing
Under the new framework, ODC will select qualified, long-term buyers — primarily established diamond manufacturers — and allocate specific volumes, quality assortments, and pricing bands agreed in advance.
Crucially, contract pricing will be index-linked, allowing both ODC and its clients to share upside and downside market movements. The mechanism is designed to reduce revenue volatility while ensuring transparency and mutual risk management.
Strategic Response to Market Pressures
With the global diamond trade grappling with subdued consumer demand and pricing instability, ODC’s pivot reflects a broader industry move toward predictable supply relationships. By balancing contract sales with selective tenders, the company aims to secure steadier cash flows while maintaining market responsiveness.
The transition signals Botswana’s intent to strengthen marketing resilience as it assumes a growing role in the global diamond value chain.
Disclaimer: This information has been collected through secondary research and TJM Media Pvt Ltd. is not responsible for any errors in the same.
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