Last year Botswana was overtaken by Russia as the world’s top producer.
This means the honeymoon is over, where the diamond industry that led the world has fallen on hard times. The discovery of the gems nearly half a century ago transformed the southern African nation from a dusty farming backwater into one of the continent’s wealthiest societies. Thousands of miles of dirt roads were paved and schools and clinics built in every town. The capital, Gaborone, once a rural village, is now dotted with office blocks and malls occupied by South African chains like Shoprite Holdings Ltd. The country’s finances were in such good shape that Botswana earned the highest credit rating in Africa.
Now the diamond mining industry is floundering as jewelry sales stagnate amid a slowdown in China. An index of rough diamond prices hit a five-year low last month. With most diamonds near the surface having been extracted from Botswana’s mines, the gems are also becoming increasingly inaccessible. Read more