Botswana's Okavango Diamond Sales -23% in 1H

Jul 9, 2015 8:23 AM By Avi Krawitz

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RAPAPORT... Okavango Diamond Company’s rough diamond sales fell 23 percent year on year to $231 million in the first half of 2015, the company confirmed with Rapaport News.

“Although we saw a temporary improvement in rough market sentiment and prices early in 2015, prices dipped again after the March Hong Kong show and the recent bankruptcies in India have now prompted further uncertainty in the market,” said Toby Frears, Okavango’s managing director.

He added that the company’s prices have softened since the third quarter of 2014, in line with market trends. However, the average price achieved fell by just 2 percent to $178 per carat during the six month period. Frears explained the marginal decline was due to variations in Okavango’s product mix, particularly the large stone content, as the company has been able to offer significant high-value stones during the year.

Okavango’s sales by volume dropped 21 percent to 1.296 million carats during the period and the company sold 745 of the 794 lots on offer.

Okavango was established in late 2013 as the Botswana government’s vehicle to sell local production independently of De Beers. The parastatal is entitled in 2015 to 14 percent of diamond production recovered by Debswana, the mining joint venture between De Beers and Botswana. Its share of production will rise to 15 percent in 2016 through 2020.

The government, which also owns a 15 percent stake in De Beers, is hoping Okavango sales will help it gain better rough price discovery and also help boost state revenue.

Botswana’s gross domestic product (GDP) growth slowed to 4.3 percent year on year in the first quarter of 2015, from 5.3 percent in the preceding quarter, Statistics Botswana reported this week. Growth slowed due to a 2.5 percent decline in diamond production, the group explained.

Tags: Avi Krawitz, Botswana, Botswana government, De Beers, Debswana, diamonds, ODC, Okavango Diamond Company, Rapaport