Clifford Elphick, CEO of Gem Diamonds, has expressed hopes that the recent political shift in Botswana will address alleged irregularities in the country’s diamond market, which he claims have disrupted global pricing. The remarks follow November’s historic election, which saw Duma Boko of the Umbrella for Democratic Change unseat the Botswana Democratic Party after 58 years in power.
Elphick’s comments, delivered during a presentation on Tuesday, pointed to concerns about the impact of “inappropriate” diamond sales by a major competitor operating in Botswana. The country is a global leader in diamond production, and its policies significantly influence market dynamics.
The CEO suggested that the competitor’s sales practices have undercut the market for high-value stones, such as those produced at Gem Diamonds’ Letšeng mine in Lesotho, renowned for its recovery of exceptional-quality diamonds. “For our business, this may have an impact. We believe certain practices out of Botswana have adversely affected our market,” Elphick stated.
He expressed cautious optimism that the new administration in Botswana might recalibrate these practices. “Hopefully, the situation will resolve itself under the new government. We believe there is an opportunity for change, but we will have to wait and see,” he added.
The competitor in question is widely believed to be Lucara Diamonds, a Toronto-listed firm known for its Karowe mine in Botswana. Lucara markets large diamonds—often exceeding 10 carats—through a partnership with Antwerp’s HB Group and the Botswana government. However, Lucara has faced financial challenges, including delays in its underground expansion project and leadership changes, with former CEO Eira Thomas replaced by her predecessor, William Lamb, last year.
Gem Diamonds has also encountered headwinds. Elphick confirmed that the company would abandon plans for underground mining at Letšeng’s satellite pipe, citing unfavourable market conditions. Instead, it has opted for an additional cutback in its open-pit operations, a move aimed at reducing waste costs despite lower diamond-bearing tonnage.
Production forecasts for Letšeng in 2025 are set between 84,000 and 88,000 carats, a decrease from 2024 levels. Sales are also expected to decline, with guidance of 82,000 to 86,000 carats. Nevertheless, the company anticipates a reduction in operating costs, projecting unit costs of $232 to $242 per ton compared to $255 per ton in 2024.
The broader diamond market remains under pressure, as evidenced by the 24% year-to-date drop in Gem Diamonds’ share price. While initial reports of strong Thanksgiving polished diamond sales in the United States offered some encouragement, Elphick urged caution, emphasising that it was “too early to declare a market recovery.”
Botswana’s diamond industry, integral to its economy, is closely watched by global markets. The implications of President Boko’s policies for the sector remain uncertain, but stakeholders will likely monitor developments closely in the months ahead.
