Natural Diamond Market Downturn, Industry Magnates Cut Back Production Again

Global staple commodity market still remains weak, and natural diamond market remains weak, too. Therefore, Debswana, a diamond mining giant in Botswana will close Damtshaa ore, and at the same time, the Orapa district #1 will also cut back the production for the next three years.

Debswana is a joint venture company run by DE Beers and the government of Botswana, and each of them own half the rights and interests. In September of this year, the company made 2015 annual production target of 22 million carats decreased to 21 million carats. Shortly after, DE beers sold Kimberley Mines in South Africa, and also shut down the Snap Lake in Canada.

The diamond exports account for more than 70% of the total export revenues in Botswana, and the output value of diamond industry creates nearly accounts for 25% of GDP. It is estimated that it will lead to about 1000 people that are unemployed.

Botswana was surpassed by Russia last year, losing the position of the world's largest diamond producer. The country's mining cost of diamond mine has been increasing, and problems such as water and electricity shortage arise , coupled with the diamond prices falling, so the competitiveness is seriously weakened.

According to the report from Botswana media, in order to cope with the diamond market downturn, Debswana Company will close Damtshaa diamond mine temporarily. In 2016, the company is expected to be 20 million carats of diamond production.

Affected by the weak demand for diamonds, low growth of global economy and other factors, in the second quarter of this year, the rough diamond sales of Debswana continue to fall sharply, which influences the entire industry, including the diamond processing and retail.