Botswana makes history with the discovery of new diamond in more than a century amid its economic crisis


Just as the world stopped buying diamonds, a Canadian mining company, Lucara Diamond Corp., announced this week that it has unearthed the world largest diamond in more than a century. The gemstone discovered in Botswana, southern Africa, is a 1,111-carat “high quality” diamond. This finding comes three months after Botswana, the second largest producer of diamonds in the world, slashed its economic outlook due to a fall in demand of the gem. The stone has similar dimensions to a baseball at 65mm x 56mm x 40mm in size and weighs 222g (7.8oz).

Value of the stone

Kieron Hodgson, a commodities and mining analyst, told Agence France-Presse (AFP) that the value of the stone is unknown and will be determined by how it behaves during cutting, its optimal shape as well as the final colour. He also added that the Diamond has the potential to be one of the most expensive in the world.

In April, a flawless 100-carat diamond was sold for $22.1 million at Sotheby’s in New York. Last week Joseph Lau, Hong Kong billionaire paid 48.6 million Swiss Francs ($48.4 million)  for a 12.03-carat blue diamond at a Sotheby’s auction in Geneva. According to the Financial times, Sotheby said the price was the highest paid at an auction for any gemstone and the highest per carat ever. This indicates that the 1,111-carat diamond has the potential to be sold at an expensive, record-breaking price.

Economic situation in Botswana

Before Russia, Botswana was popularly known as the largest producer of diamonds in the world. The mining industry provides 40% of the country’s revenue and accounts for 20% of the global diamond supply. Botswana was transformed to what it is today due to the discovery of diamond about a hundred years ago and the government owns half of the country’s largest diamond mining company.

Prior to this recent discovery, the country’s 2015 economic growth forecast was slashed to 2.6%, which signalled the country’s first budget deficit in four years. On the 2nd of November, the Bank of Botswana announced that diamond exports from the country fell by 63% to $173.4 million. This fall was as a result of China’s downturn and the ongoing anti-corruption campaign within Botswana. The southern African country is also dealing with power and water supply shortages due to drought, the worst to hit the country in 34 years, and now it plans to diversify its economy after relying on diamond all these years.

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