World’s largest diamond producer Debswana slashes output target

World's largest diamond producer Debswana slashes output target

The Jwanend diamond mine in Botswana. (Image courtesy of Debswana)

Debswana Diamond Co., the world’s No.1 diamond producer by sales value, cut Friday its 2015 production target to 20 million carats from 23 million carats.

“We had to revise our 2015 growth forecast from 4.9% to 2.6% due to (a) downturn in the global diamond market,” a spokesman for the joint venture between Botswana and De Beers, told Reuters.

A mix of weak demand and low prices has hit the southern African nation, which is the world’s largest producer of diamonds. Last month, Botswana cut its 2015 economic-growth forecast by almost half because of it and said it now expects expansion at 2.6% compared with a projection of 4.9% announced by the government in February.

Rival De Beers, a unit of Anglo American (LON:AAL), lowered its 2015 production target in July for a second time this year to between 29 million carats and 31 million carats from an initial projection of as much as 34 million carats, citing weakening demand for the precious rocks.

Okavango Diamond Company (ODC), another of Debswana’s competitors, saw sales drop by more than 20% in the first six months of the year due to low demand.

Diamonds account for more than 70% of Botswana’s export revenue.