Botswana didn’t sell any diamonds in an unprecedented ad-hoc auction as buyers refused to pay high enough prices, as the global industry continues to grapple with one of its deepest-ever crises.

State trader Okavango Diamond Co. had offered about one-million carats of rough stones in Thursday’s “closed” tender, which differed from the usual process of auctions being held for registered buyers and scheduled well in advance. The aim had been to raise revenue for the government, Bloomberg reported people familiar with the matter as saying.

But no sales were made as the reserve price wasn’t met, spokesman Dennis Tlaang said Friday. He said Thursday that ODC wouldn’t sell at prices that would have “a negative impact on the market.”

The failed sale is yet more evidence of weakness across the diamond world. The industry is grappling with one of its worst downturns in decades after suffering from a collapse in Chinese demand and fierce competition from lab-grown stones, while US tariffs have sown further uncertainty.

The market slump is also a blow for the state coffers of Botswana, one of the world’s most important producers. Diamonds, which account for 80% of the country’s export sales and around a third of government revenue, have been the bedrock of its economy for decades.

The country’s economy is likely to contract for a second successive year in 2025, according to S&P Global Ratings, which recently cut the nation’s long-term sovereign credit rating. Data released Friday showed gross domestic product fell 5.3% in the second quarter from a year earlier.

Along with lower prices, Botswana has also faced a decline in diamond output. Production slid 43% year-on-year in the second quarter, the biggest drop since the start of the pandemic, according to Statistics Botswana. It cited prolonged maintenance at a key mine and efforts to balance supply with weaker demand.

Debswana, the largest diamond miner in Botswana, has scaled back output amid the diamond slump. ODC is allocated 30% of the stones produced by Debswana, a 50:50 joint venture between Botswana and diamond giant De Beers.

ODC’s shelved sale “is not unusual in our business and in fact reflects the strength of our position in maintaining fair value for our product,” Tlaang said. Renewed interest is expected at future auctions, he said.