Botswana's state-owned diamond company turns to contract sales to manage tough market

Botswana's state-owned Okavango Diamond Company plans to increase the share of diamonds it sells to contracted buyers as a way to navigate a depressed global diamond market, Acting Managing Director Lipalese Makepe said on Wednesday.

Contract diamond sales are more predictable compared with auctions and tenders that are highly competitive and often lead to price volatility.

Surplus supplies, falling demand and the rising popularity of lab-grown diamonds have weighed on rough diamond prices in recent years. Economic slowdown has also led to reduced diamond sales.

Until last year, the state diamond marketing company mainly sold its gems through auctions and tenders because a clause in Botswana's contract with De Beers had prevented Okavango Diamond Company from directly competing with it.

CONTRACT SALES BEGAN WITH A PILOT LATE LAST YEAR

ODC was able to begin contract sales after the Botswanan government signed a new agreement with De Beers in February 2025.

"We piloted the contracts in November and December with an average of 14 customers," Makepe told Reuters on the sidelines of an African mining conference in Cape Town. The number of contracted customers has risen to 32, she added.

"We plan to sell about 50% of our Debswana allocation by value," she added, referring to ODC's allocation of production from Botswana's diamond mining company. Initially the plan was to sell 40% by contract.

Makepe said the balance of its allocation will be sold through the normal 10 auctions a year and strategic partners as well as citizen-owned companies.

ODC could also pursue special auctions, Makepe said, despite last year's inconclusive attempt.

The company sold about 3 million carats in 2025 from over 4 million carats of its allocated supply, according to Makepe, and 2026 sales are likely to be in the same range in line with their allocation from Debswana.

ODC's rough diamond allocation from Debswana – Botswana's joint venture with De Beers - increased to 30% from 25% and will reach 40% at the end of the 10-year agreement.

De Beers, the world's largest diamond company by value, is a unit of Anglo American AAL.L, which has been seeking to sell it ahead of its mega merger with Canadian miner Teck Resources TECKb.TO.

Anglo American CEO Duncan Wanblad, also speaking on the sidelines of the Indaba conference, told Reuters he was prioritising the sale, most likely to a consortium given the lack of big strategic diamond players in the current market.

-Reporting by Brian Benza, additional reporting by Clara Denina, editing by Nelson Banya and Barbara Lewis/Reuters