GABORONE, Botswana (AP) — In a village outside Botswana’s capital, Keorapetse Koko sat on an aging sofa in her sparsely furnished home, stunned that a career — and an entire nation’s economy — built on diamonds had fallen so quickly, so quickly.
For 17 years, she made a living cutting and polishing the gems that helped transform Botswana from one of the world’s poorest nations to one of Africa’s success stories. The diamonds were discovered in 1967, a year after independence, a sudden change in fortunes for the landlocked country.
Botswana has become the world’s largest producer of diamonds by value and second by volume after Russia. Diamonds are woven into the national identity, with local Olympic champion Letsile Tebogo leading a De Beers campaign celebrating how the industry funds schools and stadiums.
The stones that Koko and thousands of others have dug and polished over the decades have funded health, education, infrastructure and more in Botswana. The country risked the “resource curse” of building its economy on a single natural asset – and unlike many African nations, it was a success.
But Koko lost his job a year ago, joining many others left adrift as Africa’s natural diamond trade buckles under increasing pressure from cheaper lab-grown diamonds, mass-produced mainly in China and India.
“I’m in debt and I don’t know how I’m going to pay it,” said the mother of two, who had survived on about $300 a month and relied on her employer for health insurance. It had been a decent situation for a semi-skilled worker in a country where the average monthly wage is about $500. “Every month they call me asking for money. But where do they get it?”
“Diamonds built our country”
Botswana, which has unearthed some of the world’s largest gems, has prided itself on prudent management of its natural wealth, avoiding the corruption and strife that plagued many of its fellow Africans. Its marketing message was simple: its stones are conflict-free and help fund development.
“Diamonds built our country,” said Joseph Tsimako, president of the Botswana Mineworkers Union, which represents about 10,000 workers in the nation of 2.5 million people. “Now, as the world changes, we have to find a way to make sure they don’t destroy the lives of the people who helped build it.”
He warned that new US tariffs under the Trump administration could worsen Botswana’s recession, triggering staff freezes, unpaid furloughs and more layoffs. The US has imposed a 15% tariff on diamonds that are mined, cut and polished there.
Diamond exports, about 80 percent of Botswana’s foreign earnings and a third of government revenue, have declined.
Debswana, the largest local diamond producer and a joint venture between the government and mining giant De Beers, saw revenue halve last year. It has halted operations at some mines as Botswana and Angola enter talks to take a controlling stake in De Beers’ diamond mining unit.
In September, Botswana’s national statistics agency reported a 43 percent drop in diamond production in the second quarter, the steepest drop in the country’s modern mining history. The World Bank expects the economy to shrink by 3% this year, the second contraction in a row.
The rise of synthetic diamonds
The global growth of synthetic diamonds has been rapid. They “gave tough competition, especially for lower quality stones,” said Siddarth Gothi, president of the Botswana Diamond Manufacturers Association.
Jewelry appeared in the 1950s for industrial use. By the 1970s they had reached jewelry quality. Lab-grown stones now sell for up to 80% less than natural diamonds. Once accounting for just 1% of global sales in 2015, they have grown to nearly 20%.
Flashy social media videos have fueled the appeal of synthetic stones made in weeks under intense heat and pressure and marketed as cheaper, conflict-free and eco-friendly alternatives to stones formed over billions of years.
Environmental groups have said mining for natural diamonds can lead to deforestation, destroy habitats, degrade soil and pollute water. But environmental claims about synthetic stones are also under scrutiny, with critics noting that production remains energy-intensive, often fueled by fossil fuels.
From a “marginal phenomenon”, an “unprecedented deluge” of synthetic materials is now threatening the value and future of natural diamonds, World Federation of Diamond Exchanges president Yoram Dvash warned in July.
Lab-grown stones now make up the majority of new engagement rings in the U.S., he said. Natural diamond prices have fallen by about 30% since 2022, leaving the industry at what Dvash called “a critical juncture.”
Hollywood stars including Billie Eilish and Pamela Anderson and Bollywood celebrities have boosted the allure of synthetic diamonds, along with Gen Z influencers.
“The new generation of young people getting engaged have much more important things to spend their money on than a diamond,” said Ian Furman, founder of Naturally Diamonds, which sells natural and synthetic diamonds in neighboring South Africa. “So it became so attractive for them to buy lab diamonds.”
Furman said that for every 100 diamonds his company sells, about 95 are synthetic, when just five or six years ago, they were overwhelmingly natural.
African producers are feeling the pain
The change is felt beyond Botswana. In southern Africa, declining natural diamond production and incomes have led to job cuts and a financial crisis.
To buck the trend, Botswana, Angola, Namibia, South Africa and Congo agreed in June to pool 1 percent of annual diamond revenue, translated into millions of dollars, in a global marketing push led by the Natural Diamond Council to promote natural stones. The nonprofit’s members include major mining companies such as De Beers Group and Rio Tinto, which have invested heavily in natural diamonds.
Last year, the council launched a “Real. Rare. Responsible” campaign featuring actor Lily James in an attempt to portray natural diamonds as unique and ethically sourced.
Kristina Buckley Kayel, the council’s managing director for North America, said restoring the “desirability” of natural diamonds was essential to protect producers’ economies, particularly in South Africa.
With diamond revenues no longer assured, Botswana’s government in September created a sovereign wealth fund focused on investment and diversification beyond mining, although details of its value and investors are sketchy. Suddenly, the country’s elephant-filled tourism industry and other mining options, including gold, silver and uranium, are more important than ever.
But for Koko, the laid-off diamond worker, the policy change may have come too late.
“I was the breadwinner for a big family,” she said. “Now I don’t even know how to feed myself. Looking for another job is very difficult. The skills I learned are only relevant to the diamond industry.”
She herself has never owned a diamond. Even the smallest would be a luxury beyond her means.
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Mutsaka reported from Harare, Zimbabwe. Associated Press writer Mogomotsi Magome in Johannesburg, South Africa, contributed to this report.
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