Data confirms mining price freefall
Lewanika Timothy | Monday September 15, 2025 10:34
Latest numbers from local data agency, Statistics Botswana, show that from July last year to March of this year, the prices of diamonds, soda ash, and coal have been on a freefall, with local miners getting less and less value for their minerals in each successive quarter.
The Mining Producer Price Index (PPI), which estimates the prices that mining companies get paid for what they produce (like diamonds, copper, and coal), shows that for the first quarter of 2025, the PPI dropped to 80.4, representing a steep 30.7% from the 116.1 recorded in the final quarter of 2024. This comes on the back of a tough 2024, where the PPI had already slipped by 10.8% in the third quarter.
“In quarter one of 2025, the PPI was 80.4, realising a decline of 30.7% from 116.1 registered in quarter four of 2024. The drop was mainly attributed to the decline in the indices for diamond (32.4%) and soda ash (5.8 percent),” the index report highlighted.
“The Mining Producer Price annual inflation for the first quarter of 2025 stood at -32.9%, a drop of 18.9 percentage points from -14% recorded in the fourth quarter of 2024,” researchers noted. The major contraction in pricing was seen in the diamond sector, which has been facing significant headwinds from an international demand collapse that has weighed down on pricing as well. The diamond market has been affected by a slow recovery in key markets like China, and also competition from synthetics.
The diamond demand collapse has been so lethal that diamond giant De Beers lost $189 million in the first six months of 2025. The group said that the loss is not a sign of a tougher future.
The country has not just been facing price pressures for its commodities. A separate report by Statistics Botswana showed that an index tracking the volume of mining production in the country stood at 77.2 in the first quarter of 2025 compared to 84.9 registered in the corresponding quarter of 2024, showing a year-on-year decrease of nine percent. The report showed that diamond production recorded a decline of 8.1 percent (411,000 carats), declining from 5,076 thousand carats during the first quarter of 2024 to 4,665 thousand carats during the first quarter of 2025. . Other commodities, such as copper in concentrates production, decreased by 8.2 percent, from 12,433 tonnes registered during the first quarter of 2024 to 11,415 tonnes over the same period of 2025.
Botswana's economy contracted by three percent in 2024 largely due to the diamond market downturn, but the government had expected mineral revenues, including diamonds, to more than double this year, which would help it avert another recession.
In light of the latest developments, it remains highly unlikely for governments' forecasts to come to pass, which may roll budget deficits and economic contraction further than the forecast.