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Botswana’s diamond powerhouse, Debswana, is set to venture into international capital markets for the first time, a bold move aimed at financing its ambitious $6 billion Jwaneng underground project. The strategic shift comes as dwindling revenues, battered by a global diamond market downturn, severely crimp the company’s traditional ability to self-fund its colossal capital undertakings.
Despite the prevailing gloom in the global diamond trade since the latter half of 2023, Debswana remains steadfast in its commitment to the colossal Jwaneng underground venture. Managing Director Andrew Motsomi, speaking at a mining conference in the capital Gaborone on Monday, affirmed the company’s resolve to extend the lifespan of its flagship Jwaneng Mine to 2054 by transitioning from open-pit to underground operations.
The financial strain on Debswana, a 50-50 joint venture between the Botswana government and global giant De Beers, is evident in its recent production cuts. Having already slashed output by 27% in 2024, the company last week announced a further reduction of 16% for 2025, aiming for a total output of 15 million carats. Historically, Debswana has relied heavily on internally generated funds or direct injections from its powerful shareholders to bankroll its capital projects. However, the current market reality demands a new approach.
“With revenues declining, the company is facing escalating capital requirements,” Motsomi revealed, highlighting a projected increase in capital expenditure from an average of 5 billion pula ($373 million) per annum over the past five years to a substantial 8 billion pula per annum for the next five-year period.
To unlock new funding avenues, Debswana is now actively pursuing an international credit rating, a crucial step that will enable it to tap into global capital markets. Motsomi, however, did not disclose the precise amount of funding the company aims to secure from these markets.
The urgency of the Jwaneng underground project is underscored by the finite lifespan of the current open-pit operations, which are expected to reach their economic limit around 2034. Debswana officially commenced the underground development in May last year, a testament to its long-term vision despite the immediate market challenges.
Adding a glimmer of hope to the proceedings, Botswana’s Minister of Minerals and Energy, Bogolo Joy Kenewendo, expressed cautious optimism for a recovery in diamond sales, forecasting an upturn starting in 2026. This anticipated rebound, she believes, will be underpinned by key structural shifts within the industry and long-term strategic investments.
“Since January, we have begun to see positive signs in the market,” Minister Kenewendo stated. “While we are not yet where we want to be, the upward trend is encouraging and gives us hope for a more robust recovery in the latter half of the year.” Her words offer a much-needed beacon for Debswana as it embarks on this unprecedented journey into the international financial arena, seeking to secure the future of one of Africa’s most vital economic engines.
