case-study-botswana-downstream-linkages-2e9fe01b639bb9e6.pdf

This case study examines Botswana's strategy to develop downstream diamond beneficiation by leveraging its strong bargaining position during license negotiations with De Beers. The government established a framework to move from raw diamond extraction into cutting, polishing, and trading, though it faces ongoing challenges from low-cost Asian competitors and depleting reserves.

• Botswana successfully negotiated a downstream beneficiation agreement with De Beers due to a strong bargaining position driven by De Beers' loss of global market power, its high reliance on Botswana for 60 per cent of its rough diamond supply and 70 per cent of its profits, and the necessity of renewing mining licences.
• The government implemented a structured downstream policy by establishing the Diamond Trading Company (DTC) Botswana in 2008 to sort, value, and market diamonds to local firms, and a Diamond Office to manage strategic alliances and infrastructure at the Diamond Technology Park.
• To make the local industry viable despite higher costs, the government secured a guaranteed allocation of rough diamonds for sightholders at wholesale prices 20 to 30 per cent below market price, allowing firms to cross-subsidize Botswana operations with activities in countries like India and China.
• Botswana's downstream policy has achieved measurable success, with the cutting and polishing industry employing approximately 3,750 people as of 2014 and the government securing the right to buy and sell 15 per cent of Debswana's production on the open market.
• The industry faces significant competitive pressure from Asia, particularly India, where cutting and polishing costs are three to five times lower than in Botswana. This vulnerability was highlighted in 2015 when the country's oldest cutting and polishing company closed, resulting in 350 redundancies.
• The long-term sustainability of the policy is threatened by the fact that beneficiation was pursued late in the life of the deposits, which are expected to be depleted in 30 to 40 years, and the potential disruption of skilled labor by computer numerically controlled technologies.
• While the diamond sector has grown, the focus on downstream beneficiation may have hindered broader economic diversification and the development of an inclusive, private sector-led growth model.

APA

International Institute for Sustainable Development (n.d.). case-study-botswana-downstream-linkages-2e9fe01b639bb9e6.pdf. https://www.iisd.org/sites/default/files/publications/case-study-botswana-downstream-linkages.pdf

Chicago

International Institute for Sustainable Development. case-study-botswana-downstream-linkages-2e9fe01b639bb9e6.pdf. n.d. https://www.iisd.org/sites/default/files/publications/case-study-botswana-downstream-linkages.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=case-study-botswana-downstream-linkages-2e9fe01b639bb9e6.pdf |url=https://www.iisd.org/sites/default/files/publications/case-study-botswana-downstream-linkages.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndcasestudybotswanadownstreamlinkages2e9fe01b639bb9e6pdf, author = {{International Institute for Sustainable Development}}, title = {{case-study-botswana-downstream-linkages-2e9fe01b639bb9e6.pdf}}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/sites/default/files/publications/case-study-botswana-downstream-linkages.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }