The Okavango Diamond Company (ODC), Botswana’s state-owned rough diamond marketer, is set to begin selling diamonds through long-term contracts starting next month. This was revealed by Managing Director Mmetla Masire during the African Mining Summit on Wednesday.
Masire said the move marks a significant shift in ODC’s sales strategy as the company diversifies its marketing channels. “This initiative is designed to provide greater supply security for customers while supporting ODC’s strategic growth,” Masire noted.
Contract sales involve predetermined supply agreements with vetted buyers over extended periods. This model differs sharply from the traditional auction-based system, which is characterized by price volatility and uncertainty.
“We are ready to make the announcement. What we are currently doing is final stakeholder engagement, and then we will make the announcement,” Masire said.
While traditional auctions create a competitive bidding environment that often leads to fluctuating prices based on short-term market conditions, contract sales offer greater predictability. Buyers and sellers benefit from agreed-upon volumes, quality specifications, and pricing mechanisms.
This stability is especially valuable during market downturns, when auction prices can become highly volatile and supply chains are more susceptible to disruption.
The contractual model allows manufacturing clients to secure consistent supplies without competing against speculative bidders who may artificially inflate prices or create scarcity.
The contract sales approach also addresses a long-standing gap in the diamond supply chain—providing industrial users with predictable access to rough diamonds. Unlike auction participants who must adapt to variable offerings, contract buyers can specify their requirements in advance, ensuring they receive parcels that match their processing capabilities.
ODC plans to allocate approximately 40% of its rough diamond supply to contract sales. The remaining supply will continue to be sold through auctions, strategic partnerships, and domestic beneficiation initiatives.
