Botswana's Diamond Dominance Faces Technological Shake-Up

Botswana's economic model, long centered on diamonds, is showing signs of vulnerability. The country's reliance on the precious stones, which account for about 70% of exports and one-third of government revenue, has raised concerns about its ability to withstand shifts in global demand and changing consumer preferences. As technology continues to reshape the way people define and produce precious commodities, Botswana faces urgent questions about diversification, competitiveness, and the future of its mineral wealth.

The recent claim by Marathon Fusion, a San Francisco-based startup, that it had converted mercury into gold has revived the debate about the future of precious commodities. Although the claim remains unverified and should be treated with caution, it raises a broader question about what happens to commodities whose value depends largely on scarcity. If technology makes it commercially viable to produce materials once considered rare, the assumptions that support their value could be shaken. This question is particularly relevant to Botswana, where diamonds have long been central to the economy.

The experience of De Beers' laboratory-grown diamond business offers a clear example of how established markets can change. In 2018, the company launched Lightbox, a brand that sold laboratory-grown diamonds for about US$800 per carat. However, De Beers discontinued Lightbox in May 2025 after laboratory-grown diamond prices fell for an extended period, partly due to increased production by Chinese manufacturers. This episode showed how difficult it can be to defend premium prices when new technology and lower-cost production reshape an industry.

Botswana's diamond output has been declining, falling from 17.9 million carats in 2024 to 15.1 million in 2025. Mineral revenues for the 2025/26 financial year were projected to fall below half their historical annual average. The downturn has heightened concerns about the country's fiscal position, with lower mineral receipts limiting the government's ability to fund development programs, public services, and infrastructure. In March, S&P Global Ratings downgraded Botswana to BBB-, the lowest investment-grade rating, underscoring the economic risks of weaker mineral performance and growing fiscal strain.

In this context, Botswana Ash (Botash), the country's soda ash producer, has increasingly featured in discussions about economic diversification. The company could broaden the country's mineral base and create new export opportunities. However, presenting soda ash as the next economic savior would risk repeating the mistake of relying too heavily on diamonds: tying the country's fortunes to another commodity shaped by international market forces. Botswana needs a more varied and resilient economy, one that expands manufacturing, services, technology, value-added production, and private-sector participation.

The challenge for Botswana is not simply to find a new mineral to replace diamonds but to build a more diversified economy. The country's continued reliance on mineral income raises a difficult question: have successive diversification strategies done enough to transform the structure of the economy? The growing interest in Botash is encouraging, but diversification cannot mean swapping diamonds for another extractive industry. Soda ash may offer real opportunities, but it remains exposed to price fluctuations, production costs, international competition, and changes in industrial demand.

To achieve economic resilience, Botswana must move beyond the belief that what is scarce today will remain valuable tomorrow. The country needs to anticipate disruption, invest in research and development, and build businesses that create value beyond resource extraction. Economic security will depend on Botswana's ability to build wealth through innovation, productive industries, skilled workers, and competitive businesses. Natural resources can create wealth, but they cannot guarantee economic security indefinitely.

Key points

• Botswana's economy is heavily reliant on diamond exports, accounting for about 70% of exports and one-third of government revenue.
• Laboratory-grown diamonds have intensified competition and blurred the traditional link between scarcity and value in the diamond market.
• Botswana needs a more varied and resilient economy, expanding manufacturing, services, technology, value-added production, and private-sector participation to achieve economic security.