Botswana Faces Slow Recovery as Diamond Inventory Grows

The Botswana government expects prolonged weakness in the diamond market as prices for its rough continue to fall while its inventory has skyrocketed over the allowable limit.

Mineral revenues, which are derived primarily from diamonds, the country’s top export, are likely to reach BWP 10.3 billion ($747.7 million) in the 2025-26 fiscal year, versus a historical average of BWP 25.3 billion ($1.84 billion), amid a sales slowdown, the government said Tuesday in its 2026-27 budget strategy paper. Meanwhile, prices have dropped 23% from $129 per carat at the end of 2024 to $99 per carat a year later.

“The recovery in mineral revenue is expected to be prolonged,” the government explained. “The shortfall is likely to persist over the medium to long term with a possibility of non-recovery.”

Botswana is also anticipating challenges from a glut of inventory it can’t sell in the current market. At the end of the year, it held 12 million carats of rough, nearly double the government’s allowable limit of 6.5 million carats. That means the country will need to hold back on output until “the level of inventories is drawn down closer to minimum allowable levels, creating room for additional production.”

The downturn in the diamond sector, and the lack of diversification in Botswana’s gross domestic product, has led to a rise in unemployment.

Three main diamond mines operate in the country, including the Lucara Diamond Corp.-owned Karowe deposit. However, most of the government’s inventory comes from De Beers’ Jwaneng and Orapa sites. In the third quarter of 2025, the miner’s production in the country increased 51% to approximately 6 million carats, with Jwaneng accounting for more than 3 million and Orapa for 2.9 million.

Image: Rough diamonds. (De Beers/Ben Perry/Armoury Films)