Media reports based on budget documents prepared by Botswana’s Ministry of Minerals, Energy and Water Resources point to the possibility of the country’s mineral revenues decreasing in the fiscal year 2019-20.
Mineral revenues are projected to drop by 4 % to 13.6 billion pula (US$ 1.26 billion), “due to a decline in royalties and dividends”, said both Mining.com and Miningweekly.com based on a Reuters report.
The report said that Mineral Resources Minister Eric Molale had stated that not only was global diamond demand showing signs of slowing down but that retail jewellery sales had actually fallen during the last quarter of 2018, while polished prices continued to decline into the beginning of 2019, although at a slower rate.
“Trading and prices of diamonds are expected to remain subdued during the first quarter of 2019 due to significant overstocking of small polished diamonds,” the report quoted Molale as saying in the document.
The most important company in the sector is diamond giant Debswana, a joint venture between Anglo American’s De Beers and Botswana. In 2018, the Company – one of the largest contributors to Botswana’s revenues – is said to have produced 24.1 million carats of diamonds a 6% increase over production for 2017.