Debswana revenues reach P14bn in Q1
Mbongeni Mguni | Tuesday May 9, 2023 06:00
The country’s main economic actor sold P56.6 billion in 2022, an all-time high and a boost for budget revenues which have suffered deficits that pre-date the pandemic.
Debswana sells 75% of its production through the De Beers’ ecosystem and the balance, 25%, is allocated for purchase by the Okavango Diamond Company, the state-owned diamond trader.
Figures released by the Bank of Botswana recently indicate that Debswana’s mines powered through the first quarter, with sales rising five percent on the fourth quarter of 2022. In US dollar terms, however, the sales in the first quarter of the year were flat on a year-on-year basis, owing to the continuing strength of the greenback.
In pula terms, the Q1 sales were the highest quarterly figure since the second quarter of last year and continue the robust rebound seen in the country’s rough diamond sector in the aftermath of the COVID-19 pandemic. Separate figures provided by Anglo American show that Debswana produced 6.9 million carats in the first three months of the year, up 12% over the corresponding period in 2022.
On a quarter-on-quarter basis, the production was up 19%. Anglo American owns 85% of De Beers, with the balance held by the government of Botswana. De Beers and the government are 50/50 equity partners in Debswana. “In Botswana, production increased by 12% to 6.9 million carats, primarily driven by the planned treatment of higher grade ore and continued strong plant performance at Orapa,” Anglo American’s production report reads. Production at Jwaneng rose 21% on a quarter-on-quarter basis in the first three months of the year, while Orapa’s output increased by 17%.
Diamond sales are the backbone of the country’s economy accounting for more than a third of government revenues and most of the country's foreign currency receipts. Debswana accounts for about two thirds of De Beers’ annual production. The diamond group and the government of Botswana have a June 30 deadline to finalise a new agreement for the mining and sale of diamonds from the country.