The Botswana Institute for Development and Policy Analysis (BIDPA) has indicated that Botswana will feel a greater impact of synthetic diamonds which are increasing in supply and expected to accumulate more than 30 percent of market for mined gem quality diamonds by 2018.
In a research report released recently researchers for the government’s research tank said compared with other countries in the SADC region, Botswana is the most vulnerable to any supply shock stemming from synthetics because it has the least diversified economy of all diamond producing countries.
According to Roman Grynberg, the BIDPA Senior Researcher on issues of international trade, the uncertainty created by synthetics and their decreasing cost of production will decrease the expected profitability of further exploration for mined diamonds.
Grynberg said evidence suggests that synthetic diamonds can be produced at a fraction of the cost of extracting mined diamonds and while Botswana can survive a sustained penetration by synthetics, the expected price decreases would mean that government revenues would certainly decline dramatically. More details here. (Echo Newspaper: 11 April, 2014)