Image credit: De Beers Group (Facebook)
Botswana's mining industry is expected to shrink by nearly a quarter this year before it recovers in 2021 on the back of an improved diamond market and commencement of production at a new copper mine.
President Mokgweetsi Masisi was quoted as saying by Reuters during the state of the nation address on Monday that the mining sector will contract by 24.5% in 2020.The mining industry contributes 80% of foreign exchange earnings and accounts to a fifth of the country's GDP.
Debswana, a joint venture between Botswana and De Beers, shipped rough diamonds worth $287-million in the third quarter of 2020 compared to $863-million, a year earlier.
Botswana's rough diamond exports dropped by about 66% in the third quarter compared with the same period last year, according to data released by the central bank.
The decline was due to the COVID-19 pandemic that saw global travel restrictions being put in place to curb the spread of the virus.
Botswana's borders were closed in March, which made it difficult for foreign diamond buyers to travel to the southern African country for monthly diamond sales conducted by De Beers in Gaborone.
Botswana gets about 30% of its government revenues from diamonds, which account for 70% of exports.
Meanwhile, Masisi said the mining sector is expected to register a growth of 14.4% next year.
"The diamond markets in the United States, China and Europe are beginning to show sign of recovery and are expected to stabilise by December 2020," he said.
The Khoemacau copper mine is also expected to be commissioned in the first quarter of 2021 and the expansion of the Morupule Coal Mine is expected to produce an additional one million tonnes per annum of coal by September 2021.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
