Botswana failed to sell any diamonds in an unprecedented ad-hoc auction last week, after buyers refused to meet the reserve price
GAZETTE REPORTER
A move by Botswana to generate urgent revenue from diamonds in an unusual ad-hoc auction last week ended in failure, as buyers rejected the reserve prices in what experts’ attribute to deepening turmoil in the global diamond market.
The auction comes just two months after President Duma Boko warned that Botswana may need to sell diamonds independently of De Beers if the company is unable to facilitate sales.
No Buyers at Ad-Hoc Sale
State-owned Okavango Diamond Company (ODC) had offered about one million carats of rough stones in a “closed” tender last Thursday, according to Bloomberg. The auction was a departure from the usual scheduled sales for registered buyers and was intended to raise government revenue.
However, no sales were made. ODC spokesman Dennis Tlaang told Bloomberg last Friday:
“We wouldn’t sell at prices that would have a negative impact on the market. Unsold auctions are not unusual in our business and in fact reflect the strength of our position in maintaining fair value for our product.”
ODC to Brief Government
Reached for comment, ODC Managing Director Mmetla Masire said the company was not yet in a position to discuss the auction’s outcome:
“We cannot engage on the matter as we are yet to have engagements with our shareholders, which is the government. We are from the long holidays,” he said.
Fiscal Concerns
Leading economist Sennye Obuseng described the auction’s failure as:
“Emblematic of the level of uncertainty and risk now inherent to the natural diamonds industry. It also affirms the structural shift in demand for natural diamonds. This is a reminder that we must tread very carefully as we consider more exposure via the purchase of an additional 36% of De Beers shares. It could spell fiscal disaster for Botswana.”
Market Under Pressure
The failed auction adds to mounting evidence of weakness across the diamond sector, which is experiencing one of its deepest downturns in decades. The slump is attributed to a collapse in Chinese demand, growing competition from lab-grown diamonds, and uncertainty from tariffs in the United States.
Diamonds account for roughly 80 percent of Botswana’s export earnings and about one-third of government revenue, making the current market downturn a serious concern for the country’s fiscal stability.
De Beers Stake Negotiations
President Boko has emphasized his administration’s aim to finalize a deal by the end of next month to acquire a majority stake in De Beers.
Production Slowdown
Statistics Botswana reports a sharp fall in diamond output, with production declining 43.1 percent year-on-year in the second quarter of 2025 — the largest drop since the second quarter of 2020.