Botswana's $6 Billion Battle Against Synthetic Diamonds

Botswana's President Mokgweetsi Masisi labels synthetic diamonds as a threat to the country's economy as it prepares to extend the Jwaneng diamond mine's lifespan with a $6 billion project. Attending the JCK Show, Masisi aims to promote Botswana's natural diamonds and counteract the appeal of lab-grown alternatives.

Reuters | Updated: 30-05-2024 02:04 IST | Created: 30-05-2024 02:04 IST
Botswana's $6 Billion Battle Against Synthetic Diamonds
Mokgweetsi Masisi

Botswana's President Mokgweetsi Masisi on Wednesday called synthetic gems a threat to the country's economic lifeblood, as the government readies to launch a $6 billion project to extend the life of its flagship Jwaneng diamond mine.

The natural diamond market has struggled in the past two years due to rising consumer demand for cheaper lab-grown diamonds, coupled with global macroeconomic volatility. Masisi will participate this week at the JCK Show in Las Vegas, considered the world's largest jewellery trade event, to promote Botswana as a leading producer of ethically and responsibly sourced diamonds as the country looks to safeguard its market share for natural diamonds.

According to industry watchdog Kimberley Process Certification Scheme data, Botswana produced 20% of the world's total rough diamonds in 2022, behind Russia. The southern African country is, however, the world's top diamond producer by value. The gems contribute up to 40% of government revenue, 75% of its foreign exchange earnings and a third of national output.

"If lab grown diamonds take our space, then you and I are finished," Masisi told reporters as he departed for the United States. He added he would wage "a peaceful assault against lab grown diamonds, to give confidence to our partners and dampen any attraction to lab growns."

Botswana and its partner De Beers, set to be spun off by parent company Anglo American, plan to launch the first phase of a $6 billion project on June 28 to extend the Jwaneng mine's lifespan from the current 2032 horizon to 2054. The first phase, expected to cost $1 billion, will establish a drilling platform to make comprehensive sampling of diamond-bearing rock easier. It will also develop essential infrastructure to support further stages of the project.

Jwaneng, in operation since 1982, produces an average 11 million carats per year, employing 2,100 permanent employees and 3200 contractors. At the show, Masisi also plans to lobby the United States against plans by the Group of Seven (G7) countries to ensure all diamonds entering the bloc pass first through Antwerp in Belgium for certification.

The U.S., which consumes around 40% of the world's diamonds, is a leading member of the G7 bloc pushing for certification as part of sanctions imposed on diamonds from Russia following its invasion of Ukraine.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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