“We see the diamond sector having a bit of a tough year due to an expected slowdown in consumer demand particularly in the USA, because of pressure on real income and consumption,” finance ministry senior policy advisor, Keith Jefferis told Reuters.
In 2023, Botswana expects diamond output to decline by 1%, while diamond trading growth is seen slowing to 7% from 41% last year.
Debswana, a joint venture between Botswana's government and Anglo American Plc's De Beers, which produces almost all of Botswana's diamonds, registered an 8% growth in output in 2022 to 24.1 million carats. Diamond trading grew 41% in 2022 as Botswana also benefitted from Western buyers shunning stones from Russia following its invasion of Ukraine.
The slowdown in diamond mining in 2023 will be partly offset by higher production expected from new copper mines as well as high demand for coal.
Khoemacau copper mine in the Kalahari Copperbelt is ramping up production to its nameplate capacity of 60,000 tonnes per annum, while another new mine in the same copper province, Sandfire Resources' Motheo, is set to start production during the year.
After registering record exports last year, Botswana’s two operating coal mines, state-owned Morupule and Minergy's Masama mine, are also looking at ramping up production to meet the current high global demand for coal.
Finance ministry estimates show that government expects mineral royalties to fall to 4,5 billion pula ($3.41 billion) in 2023, from 6.1 billion pula last year. Dividends due to the state will also decline to 11,3 billion pula from 15 billion pula in 2022.