Botswana’s state-owned Okavango Diamond Company (ODC) is set to resume diamond sales in January 2025, whether the market remains depressed or not.
The diamond trading company suspended scheduled rough sales for November and December, citing market oversupply and the projected.
ODC managing director Mmetla Masire told Rough & Polished’s Mathew Nyaungwa on the side-lines of the Dubai Diamond Conference that it is Botswana’s responsibility to influence the impact of too much stock in the inventory.
He said the company doesn’t have a lot of stockpiled diamonds compared to others.
Meanwhile, Masire said Botswana is still talking with G7 as it seeks to become a node instead of having Antwerp as the single entry point.
Below are excerpts from the interview.
What made ODC suspend its scheduled end-of-year sales?
Well, we suspended auctions because clearly in the market there's oversupply in terms of the inventory levels. You'll recall this is not surprising because last year we did the same thing.
We decided that because, for us, these two sales are the least busy.
Because most people have already bought the goods to manufacture for the Christmas window.
So we found that November and December are quiet, so if you want to suspend sales, that's probably the best time to do it. And then when people start to restock in the new year, we'll be back.
So in January, we should have our sales back. So really, that's the main reason. We just believe that as the fourth largest supplier of rough diamonds, it's our responsibility to try and influence as much as possible the impact of too much stock in the inventory.
How badly were you affected by the current downturn in the market?
The downturn in the market is affecting everybody. When you look at most people's numbers, they range most of them between 80% and 60% down compared to the normal revenue. So we have no exception. If you go on our website, if you click our sales, you should be able to record that we are affected just like everybody else. So it's quite an impact on all of us.
What is the status of your stockpile?
No, we don't have much of a stockpile because we focus on sell-through [and] this is why we are not forcing through a sale in the next two months. So our stock is currently possibly sitting around $40 million. So for us, that's equivalent to one auction sale or even less than one auction sale because our auctions can go up to about $60 million to $90 million. So that's what we have, what I would call our stockpile, and that's sufficient for us to take us into the new year. As we get into the new year, we will have sufficient material to run a good auction in January.
Should the market remain depressed? Are you going to resume sales in January?
We're selling in January, regardless of what the market is. As I said, we have stock already. What is the point of keeping it if we're not going to sell it? So in January, we're going to have a sale. We will be evaluating 2025 as we go along the year, looking at what the market does. We will still possibly have sales, but what we will do is decide on the size of the sale. The size of the sale will be influenced by the market and what the market is willing to take. But we intend to continue with our sales. We've got no intention to stop selling.
This was a deliberate action by stopping for the next two months, just like we did the previous year.
How many carats have you had so far this year?
I don't know in terms of carats, but in terms of value, it's about $400 million.
How many sales did you conduct?
So that's about six sales.
How does that compare with last year?
It's about half of it.
You once advocated for several entry points for diamond verification. Are you still pushing that agenda?
We haven't changed. We believe Botswana must become a node. It makes sense because Botswana possibly has more diamonds left in Botswana than any other country besides Russia. So it makes business sense for a node to be set up in Botswana. It will be more logistically to be easier, cost of transport, proximity to everything. So you can only see positiveness. So we're still pushing for that, yes.
Are you getting any positive feedback from Antwerp?
Look, we're not talking necessarily to Antwerp. Remember, this is the G7 matter. So yes, G7 is still talking to us. Let me put it like that. So we are making progress. We believe that they are open to our discussion. So we are both mutually trying to deal with the issues.
What are you doing to market natural diamonds?
It's just a question of promoting natural diamonds and putting more advertising on them.
And waiting to see what the elections in the U.S. will do to the U.S. economy because that's critical. But for me, the key issue is the advertising of natural diamonds.
And all the stakeholders coming to the party to help us push that aspect.
Do you have the budget for that? Are you pushing in the market?
Yes, we are pushing. We are putting money into that. We are also happy to work with others if we need to increase or decrease that amount. It depends on how we can all collaborate in the industry to try and push that aspect.
How have you felt the impact of lab-grown diamonds?
They have consumed quite a bit of the market. That's why I say that we can't do much about them. It's not up to us whether consumers buy lab-grown diamonds. All we can do is promote natural diamonds and try and attract the consumer towards our product. So that's what I think we should focus on. And then the people who want synthetics can either buy synthetics or they may change and go towards natural diamonds. But as long as we promote and show people the value of natural diamonds, then I'm happy.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished, from Dubai, United Arab Emirates
