Botswana Diamonds shares fall; loss narrows but demand remains uncertain

Botswana Diamonds PLC shares fell by 20% to 0.18 pence in London, on early Wednesday afternoon. The Botswana and South Africa-focused diamond explorer said its pretax loss for the 12 months to the end of June narrowed to £564,106 from £3.7 million the year before.

Chair John Teeling noted the ‘current upheaval’ in the diamond market as prices fall and production is cut back. The company was set to receive 15% royalties at the Thorny River site in South Africa, but production was stopped due to the decline in diamond prices.

Teeling also noted that the impact of lab-grown diamonds on miners is ‘yet to be estimated’. The company said it is in ‘ongoing dialogue’ about a potential future exploration project in Zimbabwe, which had previously been impossible to invest in due to political and fiscal uncertainty.

Looking ahead, Teeling said: ‘We have confidence in the future of the diamond industry. Three billion people worldwide will enter the middle class in the coming generation. They will want the things that many in the West have, including diamonds. We already see this happening in the demand for diamonds in China and India.’ He said the impact of lab-grown diamonds will be ‘tough on many with casualties’ but the challenges ‘will pass’.