Synthetic diamond threat to Botswana economy
Gaborone-Botswana’s former Minister of Minerals, Energy and Water Affairs David Magang has warned that synthetic diamonds pose a serious threat to Botswana’s diamond-led economy. He said one of the greatest threats to Botswana’s economic well-being, if synthetic diamonds “became fashionable,” is that there would no longer be a market for natural diamonds.
“Indications are that De Beers is about to enter the synthetics market too to peg its claim on the flourishing market. Clearly, synthetics represent one of the greatest threats to Botswana’s economic well-being for the ramifications are that even if our mines were to continue to be operational for the next 100 years, no one would buy our diamonds if synthetics became fashionable,” said Magang, speaking during a presentation on the subject ‘Mitigation on Dependency of Diamonds’ at the Botswana Institute of Chartered Accountants (BICA) gala dinner. He said this is one of the biggest threats to diamonds in Botswana as (synthetic diamonds) are selling annually to the sum of US$9 billion and the market continues to grow.
He observed that while some estimates saw diamond production continuing until 2050, operating costs and capital expenditure would rise over time, as it became necessary to drill deeper to extract the diamonds, with the result that revenue from diamonds would decrease. “The cost of extracting a carat of diamonds from the dug-up ores will mount and government will simply have to resign itself to much lower returns than it has been accustomed to in the past,” he said.