Declining diamond production is expected to weigh down on Botswana’s real gross domestic product growth over the next few years, researchers at Fitch Solutions warned on Monday.
In a report, the researchers said following diamond output growth of an estimated 4% in 2018 “we forecast output to decline by an average of 2.0% annually between 2019 and 2021, before returning to expansion in 2021.”
The report said the short-term decline would be driven by the impact of the Cut Nine project at the Jwaneng mine, Botswana’s largest mine in terms of value.
The project would involve removing waste from the bottom of the mine, while both widening and deepening the pit to extend the mine’s lifespan to 2034.
“However, the Cut 9 process will also entail reduced production from the Jwaneng mine, which will see a contraction in Botswana’s output over the coming years. With diamonds being Botswana’s primary export – averaging 86.7% of total exports from 2014 to 2018 – this will see economic growth slow over the short term,” the report said.
The mining sector’s growth would become increasingly driven by coal mine production.
“However, coal only accounted for 0.3% of exports last year, and production growth will also be slowing from approximately 18.4% growth in 2018 to 15.0% in 2019 and 11.6% in 2020,” said the report.
KO/jn/APA