Botswana, the world’s top diamond producer by value, has begun enforcing a new rule requiring mining companies to sell a 24% stake in new concessions to local investors if the government chooses not to buy the stake.
The legislation, which was proposed last year, aims to increase local ownership of the country’s mineral wealth, promote local value-adding activities, and ensure mining companies establish environmental rehabilitation funds.
The southern African country, which relies on diamond sales for around 80% of foreign exchange earnings, has had a decades-long diamond mining arrangement with De Beers. But Botswana’s economy has been rocked by a downturn in the global diamond market: Sales have been hit by oversupply and poor demand, partly tied to the growing popularity of lab-grown gems.
