Glimmers of hope in mining’s doom and gloom
Mbongeni Mguni | Thursday June 26, 2025 11:13
It’s quite easy to conflate the downturn in diamonds with a slump in the general mining industry. In fact, it’s almost inevitable.
After all, diamonds dominate receipts earned from the mining sector in terms of tax revenues, royalties and dividends to government. The country’s diamond mines have the highest direct and indirect employment figures in the mining sector and are also the main breadwinners in terms of foreign currency receipts.
When people talk of the mining sector’s contribution to Gross Domestic Product, they are generally talking about diamonds.
The performance of diamonds, the broader mining industry and the economy are lockstep for better or for worse and this has been the case since the shiny stones were first mined in the 1970s.
Last year values added in the mining and quarrying sector fell by 24.1%, while the diamond traders sector contracted by 34.1%. In 2023, mining and quarrying grew by 2.9% while diamond trading contracted by 26.8%.
Minerals and Energy minister, Bogolo Kenewendo, is keen to distinguish the downturn in diamonds from the growth being seen elsewhere in the mining sector. Mining is traditionally the country’s premier target for Foreign Direct Investment and while diamonds are presently damp, there is plenty of reason for hope across the mining sector.
“It’s not all doom and gloom in the industry,” she told the Future of Mining Summit on Monday. “The diamond downturn has made it look like the entire mining industry is in a huge slump. “Yes, we are facing challenges especially as the diamond industry is experiencing some downturn, but there are many opportunities that are waiting to be unlocked.”
Kenewendo spoke about “green buds” being seen across the industry.
Cupric dreams
Compared to shiny diamonds, one mineral leading the resurgence of hope in mining, is the physically unremarkable base metal of copper, which usually emerges from the ground a dull brown or soft orange.
Dull it may be, but last year copper exports reached more than P10 billion, the highest in history, surpassing even the heydays of success prior to the meltdown of 2016 that shut BCL and other mines in the country.
While the annual figure was a third of rough diamond exports – even in their slump – the copper sales were still comfortably the highest non-diamond export of the year, indicating the potential of the base metal.
This week, Sandfire reported that last year alone, the company made a P4 billion economic contribution to Botswana comprising payments to contractors and suppliers, payments for mine properties, employee wages and pensions as well as taxes and royalties.
Driven by copper’s integral role in the global green transition, prices of the base metal are escalating, providing handsome rewards to the three operating mines in country.
Sandfire’s Motheo and MMG’s Khoemacau, both on the suddenly highly-sought after Kalahari Copperbelt in the west, are planning multi-billion Pula expansions in the next few years, reaching further into their licences to double expansion.
Increasing numbers of analysts are daring to dream – if copper production could hit anywhere near the figures in powerhouses such as Zambia, Botswana could afford to wait out the current and future slumps in diamonds.
“As we continue to explore new opportunities, copper should become one of our biggest bet,” Kenewendo said. “We therefore need to promote exploration in the Kalahari Copperbelt to discover new deposits. “To achieve this, we must mobilise resources and invite exploration companies.”
Already, BHP, the world’s biggest mining company, has sunk its stake in the Kalahari Copperbelt, investing $25 million for equity in an upcoming project.
Critical hopes
Another bright spot for mining, even in the diamond slump, is the critical minerals arena, where major developments are taking place.
At Kgwakgwe Hill in Kanye, Giyani Metals’ manganese project this week announced that it has secured a letter of intent to the tune of $225 million from the Export-Import Bank of the United States (EXIM), a U.S government agency.
The U.S is on the look-out for non-Chinese sources of critical minerals – the metals classified as essential for modern technologies, economies, and national security, in industries such as renewable energy, electric vehicles, and electronics.
According to Giyani Metals, the U.S government’s Supply Chain Resilience Initiative, aims to enhance U.S economic security by reducing dependence on critical mineral supply chains controlled by China.
Kenewendo says the minerals sector will rebound on work being done in these non-diamond sectors.
“With the work being done in base metals, rare earths and others, we believe we will see a rebound in the next few years.”
However, even within the troubled diamond sector, there are signs that despite the additional weight brought by the Trump administration’s tariffs, the end of the prolonged slump may be in sight. Tenoris, the world’s leading tracker of diamonds sales at the retail end, this week noted strong sales over the recent Mother’s Day holiday for natural diamonds as well as at the JCK Show in Las Vegas.
Kenewendo also picked on the same.
“In January we were confident that the industry would rebound by July, then tariffs came in April and some wars broke out as well,” she said. “There are however some green buds that make us confident that by the end of the year and going into 2026, the diamond industry will be back to support the economy.”
Part of this confidence comes from the Herculean efforts being made by producer nations such as Botswana, partner companies such as De Beers and industry bodies such as the Natural Diamonds Council (NDC) to revive demand for natural diamonds.
In Luanda this week, Botswana, Angola, South Africa, together with De Beers and other partners, agreed to set aside one percent of their diamond revenue toward natural diamond marketing, an effort that will be based on telling the real-world good natural diamonds do in countries such as Botswana.
The campaign is also leveraging on the widescale traceability and provenance blockchain technology introduced by companies such as De Beers and used for produce from countries such as Botswana to track diamonds from their soils, through cutting and polishing and all the way to store shelves.
“The importance is greater today than ever that we meet consumers where they are — in their quest for information on diamonds or when browsing for inspiration,” NDC CEO, David Kellie told Mmegi from London, yesterday. “A diamond is an innately emotional product and we want future generations of consumers to have the chance to connect to its value. “Consumers want to invest in products that have an innate value and that contributes positively to the producer communities.”
For all the doom and gloom, the mining industry is sparkling and even diamonds look set to regain their shine.