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Rough diamond sales fall in cycle 2

Anglo American Plc has posted lower diamond sales for De Beer’s second sales cycle of 2017, amounting to $545 million, and also a lower figure compared with the $617 million value of the corresponding cycle of 2016.


The 25% slump in the second sales cycle follows a strong opening to the year when De Beers, the world’s biggest diamond producer by value, sold $729 million worth of diamonds in its first sale of the year, a 70% increase from the last sale in December. The January figures were also 32% higher than the previous corresponding period when it sold $545 million.


Bruce Cleaver, CEO of De Beers, said: “We continued to see good demand across our product range in the second sales cycle, which was in line with expectations at this time of year. Sentiment remains positive heading into the Hong Kong International
Jewellery Show this week–an important barometer of trade confidence.”


The Hong Kong International Diamond, Gem and Pearl Show runs from February 28 to March 2 at AsiaWorld-Expo, while the Hong Kong International Jewellery Show, which features finished jewellery, takes place from March 2 to 6 at the Hong Kong Convention and Exhibition Centre. Organizers said about 4,480 exhibitors from 53 countries were participating in the two events.

 



“Despite global economic uncertainties, the strong participation of exhibitors and buying missions at the shows is evidence that the jewellery industry remains optimistic about business prospects and sees Hong Kong as an important sourcing platform for jewellery and raw materials,” said Benjamin Chau, deputy executive director of the Hong Kong Trade and Development Council (HKTDC), which organizes the show.


The diamond industry is seasonal, with the holiday period from thanksgiving in November through the Lunar New Year in Asia in January or early February the busiest period for jewellery sales. January is also a seasonally busy month for the rough sector as traders and manufacturers return to the market after working down their inventories over the festive selling period. De Beers’s sales rebounded by more than 30 percent in 2016, a marked contrast to when sales fell 34% in 2015.


The mining giant holds ten Global Sightholder Sales and Auction Sales every year in Gaborone and the sights or auction sales are restricted to the top 85 customers who buy the diamond packages at a price determined by De Beers. In 2016, the diamond behemoth sold as much as $4.9 billion worth of diamonds in its ten Sightholder sales.


De Beers which is majority owned by Anglo American Plc and the Botswana government which holds 15 percent, is also the other half of Debswana, a joint venture with the government. Debswana operates four diamond mines in the country (Orapa, Letlhakane, Damtshaa and Jwaneng). Jwaneng mine is largest and most valuable mine in the world.

 

Diamonds are the mainstay of Botswana’s economy since they were discovered shortly after the country gained independence. The partnership between the government and De Beers is one of the longest known public-private partnerships, stretching to 50 years.  The country is yet to diversify its economy away from its main export despite imminent threats in the diamond industry that include competition from synthetic diamonds, stagnated growth in leading economies and the slowdown in China that affected several commodity prices.


According to Statistics Botswana, the estimated GDP at current prices for the third quarter of 2016 was P42.7 billion compared to a revised level of P40.9 billion registered in the second quarter of 2016. The significant growth in the real Mining value added of 13.3 percent was attributed to the increase of the diamond industry value added by 9.3 percent in the third quarter of 2016 compared to a decline of 33.4 percent registered in the same quarter of the previous year. In the quarter under review, diamond production increased by 9.3 percent due to positive recovery in the global markets, particularly in the major markets for diamonds.


Strong diamond sales in 2016 have helped the country to record its largest trade balance in over sixteen years. The nation’s total exports stood at P80.2 billion against total imports worth P66.8 billion, resulting in a P13.4 billion trade surplus, a major reversal from 2015 trade deficit of P9.7 billion. Diamonds accounted for 88 percent of total exports, after shipping P70.7 billion worth of diamonds. The huge trade surplus will spur the country’s momentum as it seeks strong economic growth.

 

While the fourth quarter figures haven’t been released yet, the domestic economy is expected to recover and record a growth rate of 2.9 percent in 2016, and forecast to reach 4.2 percent in 2017. The optimistic outlook is based on the anticipated slight improvement in the mining sector, and positive growth prospects for the non-mining sectors.

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Matsheka seeks raise bond program ceiling to P30 billion

14th September 2020
Dr Matsheka

This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.

“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.

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Lucara sits clutching onto its gigantic stones with bear claws in a dark pit

14th September 2020
Lesedi La Rona

Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.

A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.

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Botswana Diamonds issues 50 000 000 shares to raise capital

14th September 2020
Diamonds

Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.

A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.

Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.

In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.

The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.

In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.

Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.

The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”

In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.

Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.

The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.

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