Saturday, June 15, 2024

Here is what the Russian diamonds sanction means for Botswana

Without beating about the bush, global mining giant, De Beers has come out to point out that one of the major issues in the diamond trading today is the sanctions that have been imposed on Russian diamonds by the US and G7 countries.

Paul Rowley, De Beers executive vice president – Diamond Trading, told journalists in the capital Gaborone on Friday that any new additional measures against Russian diamonds will ultimately impact all natural diamonds, and that there is potential risk all round.

“There is risk of unintended consequences in confidence for natural diamonds (as well as for African producers in general) if the import of natural diamonds into the G7 countries becomes too cumbersome”, said Rowley during the market update De Beers held for local journalists from the company’s premises in the capital.

The United States together with leaders of the Group of Seven recently announced they will be working together to tighten restrictions on diamonds coming out of Russia, both rough and polished. 

The Group of Seven, or G7, is an informal, intergovernmental group comprised of seven industrialized democracies being the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom.

In a statement issued in late February 2023—the one-year anniversary of Russia’s invasion of Ukraine—G7 leaders called on Russia to put a stop to the war in Ukraine.

Ukraine has been pushing to stop the import of Russian rough diamonds because the trade enriches Alrosa, a partially state-owned Russian enterprise. 

On Friday, De Beers Rowley said that the global mining giant has since started to engage key governments on ensuring requirements do not impact African diamond producers like Botswana.

Rowley said in the meantime De Beers continue to invest in technology and sustainability to underpin consumer confidence. By technology, Rowley referred to the company’s Tracr platform, which traces the origins of diamonds from the mines to retail.

The announcement for possible new sanctions came at time when De Beers’s rough diamond sales have been steadily picking up but at a slower pace than last year records.

The global diamond mining giant recently reported that they sold $495 million of rough diamonds in the second sales cycle of the year, with the value higher than the $454 million in the first sight in January. The two Sights have generated lower income than in the same period in 2022. This year’s first sales cycle value fell by 31 percent from 2022’s first Sight value of $660 million, and the latest second sales value is 24 percent lower than $652 million of rough diamonds sold in the second Sight of 2022.


Read this week's paper