BOTSWANA’S DIAMOND GIANT BANKS ON DEEP POCKETS TO RIDE OUT COVID CRISIS

De Beers, a diamond giant in Botswana is hopeful that the festive period will see a bounce back in earnings. The first half of the year witnessed a drop in earnings by 54% as a result of the COVID-19 pandemic. This slump also affects Botswana, as government revenues are derived from dividends, royalties and taxes.

For De Beers, the festive period covering Thanksgiving in the United States, Christmas, the New Year and the Chinese New Year in February represents the peak retail period, with hundreds of millions of dollars invested each year in intensive marketing globally.

The US, China and India are the main consumers of diamond jewellery, with these sales supporting rough diamond output in countries such as Botswana, which is the world’s leading producer by value. With global travel restrictions and lockdowns limiting retail sales and exports of rough diamonds this year, De Beers’ revenue slump hit its books hard, but executives say healthy financial reserves and “historical resilience” will tide the company over to the lucrative festive retail period.

“We have a very resilient business and we have been carefully managing all the aspects of our business that we can control,” Paul Rowley, De Beers executive vice president, Diamond Trading, told local journalists in a briefing recently. “We have gone into this crisis with a very strong balance sheet allowing us to support our partners and investments in strategic initiatives. “We have been around for 130 years and what we are putting in place shows that we have the resilience to go through this crisis and lead into the future.”

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