17 Nov 2024

The continued decline in diamond sales has not only resulted in Debswana’s reduced production, but also affected the direction of the new impending strategy.

As the company’s five-year strategy comes to an end this year, the managing director, Mr Andrew Motsomi told members of the 13th Parliament during their tour of Jwaneng Mine on Friday that the management had to devise a transitional strategy while working on a new one, owing to the current economic situation.

“Our 2024 strategy is coming to an end. We are busy working on the strategy for beyond 2024, but because of the current challenges, we have had to come up with a transition strategy that seeks to address the challenges that we are having in terms of the low sales.

The depressed market for diamonds has preoccupied us and we decided to give priority to that, and in the meantime operate with a transition strategy,” he explained.

The 2024 strategy, which was premised on Botswana’s Vision 2036 and De Beers Group’s vision of Making Life Brilliant, prioritised safety and environment, people transformation, innovation and digital transformation, efficiency and productivity improvement as some of its driving factors.

Mr Motsomi noted that the phase had also opened opportunities towards enhancing their operations, particularly in the area of research and development.

“We are looking at opportunities for research and development, we are currently using research and development facilities from within the group in De Beers, but going forward we wish to establish our own research and development centre,” he said.

Additionally, the managing director said they were also exploring opportunities that could enhance their aspirations of becoming future smart connected operations. He said this would go a long way in ensuring optimal and effective operations, which were cost effective and environmentally friendly.

“Our mines are very large operations that require and use a lot of resources and a future smart connected mine is an efficient way of operating and optimally running mines in a cost effective, efficient and more environmentally-friendly manner,” he said.

Further, he said the company was also devising means to generate value from some of the waste material coming from their operations, while also making plans to partner with other stakeholders on repair and maintenance, which include machinery engine overhauls as some of the opportunities to venture into.

Mr Motsomi noted that the current financial situation had also resulted in prioritising cost containment measures as a pivot for the company’s business strategy to stay afloat.

He said this was particularly important as Jwaneng mine transitioned from open pit to a more costly underground mining model, which was expected to extend the lifespan of the mine beyond 2053.

He also noted that Debswana had since reduced production following a significant decline in business performance between 2022 and 2024.

Okavango Diamond Company (ODC) managing director, Mr Mmetla Masire attributed the depressed diamond markets mainly to decline in global economy, competition from lab-grown diamonds, too little advertising for natural diamonds and geopolitical issues.

However, he noted that even though his company planned to cancel two sales this year in an effort to make a positive influence on the market inventory levels, they were hopeful for the market to stabilise from the second half of 2025. ENDS