Africa-Press – Angola. Climate-conscious consumers across the world could ‘dump’ Botswana diamonds over continued use of coal-fired energy, a World Bank report published this week has cautioned.
The World Bank says Botswana needs to act now to decarbonize its electricity sector to protect the value of the diamond industry from a possible snub by consumers who are climate conscious.
“Because diamonds are an emotional, luxury consumer good, there is a real risk of backlash from climate-conscious consumers akin to the conflict diamond awareness of the past decade, a trend already seen for other luxury consumer goods”, says the World Bank in a report published on Thursday.
While diamonds have not been included in the list of goods subject to carbon border adjustment taxes, international diamond mining companies have acknowledged the growing risk of changing consumer preferences and they are taking steps to achieve carbon-neutral operations. In Botswana, diamond production is almost entirely fueled by carbon-intensive, coal-fired energy generation.
According to the national data bureau – Statistics Botswana, the index of Electricity Generation – a key indicator of electricity generation – stood at 151.9 reflecting an increase of 8.2 percent compared to 140.3 recorded during the same period in 2021. The quarter-on-quarter comparison also shows an increase of 36.0 percent, from the index of 111.7 during the fourth quarter of 2021. The increase has been attributed to improved performance of power generators at the 600 MW Morupule B power station – the country’s biggest power generator powered by four units, and Morupule A. The two power stations are both powered by coal. Botswana has an estimated 212 billion tonnes of coal resources, with only two coal mines currently in production. While coal mining companies have been struggling to find funding due to environmental concerns, there is now growing demand for the product globally. Even more instructively, there is a silver lining in the horizon – coal prices have more than doubled since the beginning of the year after a war in Europe, giving coal miners more incentive to ramp up production.
Coal production in Botswana has increased over the years, with official data from Statistics Botswana showing that production has increased by 6.0 percent (31, 053 tonnes), from 516, 868 tonnes during the first quarter of 2021, to 547, 921 tonnes in the second quarter 2022. The increase came as a result of the efforts made to meet increased demand from both domestic and international markets.
However the World Bank said this week that Botswana needs to act now to decarbonize its electricity sector in order to protect the value of the diamond industry.
“Synthetic diamond manufacturers can more easily decarbonize their product and are doing this to grab market share”, cautions World Bank adding that, “concerns about climate issues add an urgent risk of disruption to the diamond industry that could have sudden impacts on revenues and exports”.
While there are attempts to diversify the country’s dependence away from a single commodity, diamond sales continue to be its main revenue earner. Currently the country makes about 30 percent of its revenue and 70 percent of its foreign exchange earnings from diamonds.
For More News And Analysis About Angola Follow Africa-Press
