Botswana expects lower mineral revenues

The Southern Times of Africa reported that Botswana expects mineral revenue for the 2019/20 fiscal year to drop due to a decline in royalty dividends.

Eric Molale, Botswana’s  minister of mineral resources wrote in a paper he presented to the Batswana parliament “that global diamond demand was showing signs of slowing down.”

Molale reported that retail jewelry sales had dropped during the last quarter of 2018 while polished diamond prices continued to decline into the beginning of 2019.
“The global diamond demand is showing signs of slowing down. Trading and prices to remain subdued during the first quarter of 2019 due to significant overstocking of small polished diamonds of categories below 30 points,” Molale was quoted by the publication.

Molale also noted that this year, the sales numbers of De Beers’ first sights were down 22 percent, to $545 million, compared to the same period in 2018.
“Sightholder sentiment was down with rejections standing at 17 percent. The low liquidity in the market due to tighter banking regulations in India makes it harder to borrow money, in particular, sight holders of Indian origin,” said Molale.

In 2017 and 2018, De Beers supplied Botswana’s local polishing industry with, respectively, $760 and $824 million of rough diamonds. Out of 21 factories, 17 are supplied locally by De Beers, while the remaining source rough diamonds from the open market, the minister reported.