• Diamond downturn pushes Botswana to accelerate diversification

• New partnerships with Oman, Qatar, and France target untapped resources

• Large mineral potential remains, but projects will take years to deliver

Botswana seeks to diversify its mining sector, as a prolonged downturn in diamonds exposes the limits of its economic model.

During a visit to Oman this week, President Duma Boko announced a joint exploration agreement between the Botswana Geo-Science Institute and Minerals Development Oman. The deal follows a separate trip to France days earlier, where mining investment was also a key focus, highlighting a broader strategy to attract new partners.

The urgency is clear. Diamonds account for about 70% of Botswana’s exports, one-third of government revenue, and a quarter of GDP. But the sector has been under pressure for more than three years, weighed down by falling prices for natural stones and rising competition from synthetic diamonds.

Debswana, the country’s main producer and a joint venture between the state and De Beers, has cut output by 40% between 2023 and 2025. The impact has been significant, contributing to a rare double recession, with the economy contracting by 2.8% in 2024 and 0.4% in 2025.

In response, the government is trying to accelerate a diversification effort that has long been discussed but only partially implemented.

Untapped potential draws foreign interest

Since taking office in October 2024, President Boko has increased outreach to international investors. In Paris, he urged French companies to explore opportunities in Botswana’s mining sector. Orano has already secured uranium exploration permits, at a time when France is seeking to diversify supply following developments in Niger.

In the Gulf, the agreement with Oman follows earlier commitments from Qatar. In August 2025, Al Mansour Holdings, led by Sheikh Al Mansour Bin Jabor Bin Jassim Al Thani, signed a $12 billion investment agreement covering multiple sectors, including mining.

These partnerships are underpinned by significant untapped resources. Botswana is estimated to hold around 800,000 tons of uranium reserves. Projects such as Letlhakane, developed by Australia’s Lotus Resources, could produce up to 3 million pounds of uranium annually over a decade, according to a 2025 study.

Authorities say about 70% of the country’s territory remains unexplored, offering substantial potential for future discoveries. Copper, gold, graphite, and iron ore are among the priority targets under current exploration plans.

Existing base, but long timelines

While diamonds still dominate, diversification is gradually taking shape. Botswana has built copper production capacity of more than 100,000 tons per year through two operating mines: Motheo, run by Australia’s Sandfire Resources, and Khoemacau, operated by China’s MMG.

MMG announced in 2024 a $700 million investment to expand Khoemacau’s capacity to 130,000 tons annually. Meanwhile, Australia’s BHP has entered the country through a $25 million investment in exploration projects led by Cobre.

In manganese, Canada’s Giyani Metals is advancing the K.Hill project, with a definitive feasibility study expected in the second quarter of 2026. Early results point to potential annual output of 80,000 tons of high-purity manganese sulfate, a key material for electric vehicle batteries.

Still, the gap between exploration and production remains significant. Mining projects typically take years to develop, meaning diversification will not deliver immediate relief.

In the meantime, pressure on public finances is mounting. S&P Global Ratings downgraded Botswana’s sovereign rating to BBB- with a negative outlook in March 2026. The fiscal deficit is projected to reach 8.9% of GDP in 2026–2027, while the country’s sovereign wealth fund has sharply declined, from 5.4 billion pulas (around $400 million) to 846 million pulas between mid-2024 and the end of 2025.

The International Monetary Fund has cautioned against increasing state exposure to the diamond sector, stressing that a sustainable recovery will depend on stronger private sector participation and a broader export base.

While developing new mineral resources could support that transition, the process will take time. For Botswana, the challenge is not only to attract investment, but to manage a difficult economic transition while waiting for new projects to materialize.

Emiliano Tossou