Monday, February 18, 2013

Business Diamonds exports plunge 20 percent

The value of rough diamonds exports plunged by 20 percent last year to P22.5 billion from P28 billion in 2011 as production and prices softened due to uncertainty in the global economy.
According to exports data released by the Bank of Botswana (BoB) recently, rough diamond exports in Pula terms stood at P1.3 billion in December from P1.5 billion in the previous month.Diamond exports, which have traditionally been the chief foreign currency earner, were affected by a 12 percent drop in prices in 2012, while Debswana production also fell by the same margin last year.
The 2012 exports figure is however higher than the P18.8 billion raked in from diamonds exports in 2010 and P13.7 billion in the recession year of 2009.  According to the December BoB financial statistics report, the country's budding cutting and polishing industry also contributed significantly to foreign currency receipts in the year with polished diamonds raking in P4.94 billion in the first 11 months of the year compared to P4.8 billion in the whole of 2011.
The burgeoning diamond cutting and polishing industry, which now has 21 companies operating in the country, has also contributed to the reduction of Botswana's trade deficit.From a high of 34 million carats in 2007, diamond production has plateaued in the last few years as Debswana caps production to match weakening market conditions, a development that has also slowed the growth of the economy. Botswana's economy was forecast to grow at a slower rate of 6.1 percent last year from eight percent in 2011 due to lower output from the mining sector, particularly the diamond industry.
Recently released figures from Statistics Botswana show that year-on-year growth, over the 12 months to September, fell slightly to 7.7 percent from 8.0 percent in the second quarter largely reflecting reduced growth in the mining sector, which was down to minus 12.5 percent from minus 7.7 percent over the year to June 2012.While Debswana lost output in the third quarter due to a slope failure at Jwaneng, the company ramped up production by 26 percent in the fourth quarter to 5.5 million carats from 4.3 million carats. Debswana had produced 4.9 million carats and 5.3 million in the first and second quarter of the year respectively.
The resumption and subsequent ramping up of production at Jwaneng Mine lifted the output of global mining giant, De Beers in the fourth quarter of 2012 by 24 percent. However on an annual basis, De Beers' production fell by 11 percent to 27.8 million carats in 2012.  The Jwaneng Mine traditionally supplies about 70 percent to Debswana's production. Debswana contributes the same percentage to parent company, De Beers' output.

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