Ex-Botswana Minister Warns of Threat From Synthetic Diamonds

Finance and Trade
30/08/2016 15:13

The expansion of the global synthetic diamond market poses a threat to the economy of Botswana which depends on the mining and sale of natural diamonds, according to Botswana's former Minerals, Water and Energy Minister David Magang. He claimed that De Beers was preparing to join the synthetic diamond market which meant there would be reduced options for Botswana's diamonds. He said in a speech that there were "indications that De Beers is about to enter the synthetics market". He added: "Clearly, synthetics represent one of the greatest threats to Botswana’s economic well-being for the ramifications are that even if our mines were to continue to be operational for the next 100 years, no one would buy our diamonds if synthetics became fashionable."

With more natural diamond producers shifting to synthetic diamonds, together with the rising capital and expenditure costs of operating natural diamond mines, there would be a decrease in Botswana's diamond revenues. He said while it was generally agreed that Botswana’s diamond mines would remain productive at least until 2050, there had been a 40% drop in diamond prices, a closure of mines and the loss of over 1,000 jobs in the industry over the past three years. Diamond sales account for more than 70% of Botswana’s gross domestic product (GDP).