Botswana shifts focus to critical minerals amid diamond market downturn

Botswana is embarking on a strategic pivot to broaden its mining sector beyond diamonds, targeting critical minerals as a cornerstone of its economic diversification agenda, Minister of Minerals and Energy Bogolo Joy Kenewendo announced. With approximately 70 percent of the country’s landmass still largely unexplored, the government is intensifying efforts to identify new revenue streams and mitigate the fiscal risks tied to its heavy reliance on diamonds. This initiative unfolds against the backdrop of a sustained slump in the global diamond market, a downturn fueled by economic uncertainty and rising consumer preference for lab-grown alternatives, factors that have significantly dampened one of Botswana’s primary economic engines.

Though diamonds continue to contribute roughly one-third of national revenue, the market’s contraction has starkly revealed Botswana’s exposure to commodity concentration risk. Analysis from the World Bank underscores the vulnerability of economies overly dependent on a single export commodity, highlighting increased volatility and fiscal instability amid global market shocks. In parallel, the International Monetary Fund has urged resource-rich nations to diversify their economic base, enhance geological data, and foster investment in underdeveloped sectors to secure sustainable long-term growth.

Debswana Diamond Company, Botswana’s joint venture with De Beers responsible for 90 percent of the country’s diamond output, has opted against boosting production under current market conditions. CEO Andrew Motsomi remarked, “There is no use in us burning cash and stockpiling diamonds,” as inventory levels swelled to 12 million carats by December’s end, nearly double the government’s authorized stockpile limit of 6.5 million carats. This decision underscores the urgency of expanding mineral exploration to sustain state revenues and bolster economic stability.

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Minister Kenewendo outlined the government’s commitment to recalibrating the mining sector’s focus toward critical minerals such as copper and cobalt, commodities increasingly vital to advanced manufacturing and the global energy transition. A newly established state-owned exploration company will spearhead comprehensive geological surveys, generating robust data to de-risk investment in previously underexplored regions. “Historically, most exploration focused on diamonds, but now we want to identify high-value minerals that can diversify Botswana’s economic base,” she stated.

Investor reticence remains a formidable hurdle, given the substantial costs and risks associated with exploration absent reliable geological data. Already a global heavyweight in diamond production by value, Botswana is rapidly emerging as a promising center for copper mining. International competition for critical minerals has intensified amid geopolitical jockeying between the United States and China for resources essential to clean energy and advanced manufacturing technologies.

Kenewendo revealed that the United States has expressed preliminary interest in collaborating on mineral exploration initiatives, though discussions remain in the nascent stages. Through diversifying its mineral portfolio, Botswana seeks to reduce economic susceptibility, bolster investor confidence, and assert a stronger role in global supply chains. With nearly three-quarters of its territory still unexplored, the country is poised to unlock significant mineral wealth, setting the stage for sustainable growth and enhanced participation in the burgeoning critical minerals market.

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