The Okavango Diamond Company (ODC) is pursuing a $300 million credit facility from local banks to enhance its diamond purchases, as revealed by Finance Minister Peggy Serame.
The move comes as ODC aims to strengthen its position in the diamond market amidst a challenging economic landscape.
Established in 2012 to operate independently of De Beers, ODC currently sources 25% of its diamonds from Debswana, a joint venture between the government of Botswana and Anglo American’s De Beers.
Under a new 10-year agreement, ODC’s share of Debswana’s diamond output is set to increase from 30% initially to 50%, marking a significant shift in the company’s operations.
To manage the new $300 million credit line, which follows the maturity of a previous $140 million facility in 2023, ODC has appointed Standard Chartered Bank. Additionally, the company is seeking government approval for a $175 million guarantee to support this financial initiative.
The diamond market has faced significant downturns, with Debswana’s sales plummeting by 49% in the first half of the year. In response, ODC halted rough diamond sales last October to manage an inventory surplus.
However, industry experts anticipate a market recovery by late 2024, positioning ODC to capitalize on the rebound with the support of this new credit facility.
