In a stark sign of the deepening crisis in the global diamond industry, Botswana’s state-owned trader, Okavango Diamond Company (ODC), did not sell any diamonds in an unprecedented ad-hoc auction after buyers refused to meet its price expectations, according to a report by Bloomberg.
The diamond trading company had offered about one million carats of rough stones in a "closed" tender last Thursday.
The unusual sale was reportedly aimed at raising revenue for the government, but no sales were made as the reserve price wasn't met, ODC spokesman Dennis Tlaang confirmed on Friday.
The failed sale underscores the severe weakness affecting the diamond world, which is grappling with one of its worst downturns in decades.
The industry has been hit by a collapse in Chinese demand, fierce competition from lab-grown stones, and uncertainty from US tariffs.
The slump is a significant blow to Botswana, one of the world's top diamond producers.
Diamonds account for approximately 80% of the country's export earnings and a third of the government's revenue. The economic impact is already being felt, with data showing that the economy contracted by 5.3% year-over-year in the second quarter.
The market weakness was reflected in ODC's decision to hold the line on pricing.
Tlaang said on the auction day that ODC would not sell at prices that would have “a negative impact on the market.”
Following the failed sale, he added that the outcome “is not unusual in our business and in fact reflects the strength of our position in maintaining fair value for our product,” expressing expectations for renewed interest at future auctions.
The downturn has also led to a sharp decline in production.
Botswana's diamond output slid 43% year-on-year in the second quarter, the largest drop since the pandemic, as the major miner Debswana has scaled back operations to balance supply with weaker demand.
ODC is allocated 30% of the stones produced by Debswana, a joint venture between the government and De Beers.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
