Exports triple

Bank of Botswana indicates that the February level of diamond exports, both rough and polished stones, was approximately 89 percent higher than the December sales and 65 percent higher than the November figure.

The February 2012 sales are also 35 percent higher than the P1.65 billion recorded in February 2011.

Diamond sales slumped from a record P10.1 billion in the third quarter to P6.2 billion in the fourth quarter of 2011, on weakening demand in the key US and the Euro zone markets, owing to the economic crisis.

The slump consequently pushed the Gross Domestic Product (GDP) down 5.8 percent quarter on quarter in the fourth quarter of 2011, with output in the economically critical mining sector declining by 24.8 percent.

The GDP figures, released last week seemed to confirm expectations of constrained growth and even a possible recession in 2012, stemming from a slowdown in the mining sector. However the figures released yesterday by the Bank of Botswana, confirm projections made by several producers pointing to the precious stones' resilience in 2012, despite threats of economic deceleration in traditional diamond markets.

Last week, De Beers Botswana CEO, Neo Moroka, told Mmegi the demand for diamonds has been strong at the three sights or auctions held by the Diamond Trading Company Botswana (DTCB) since the beginning of the year.

He said the sales were positive despite the fact that cutting and polishing firms still had stockpiles of diamonds from sights held last year. "Sales have been very good," Moroka said.

"Due to the downturn at the end part of last year, companies have been getting rid of the stockpiles and when the industry is selling off stockpiles, the performance is not usually good. But much to our surprise, our sights in the first quarter of the year have been above expectations, although not as good as the first quarter of 2011 which was exceptional."

Moroka said rough diamond prices were expected to trend upwards this year, based on the strong demand coming out of China, which is now the second largest consumer of the precious stones after the US.