BOTSWANA will not compromise its financial stability to increase its stake in De Beers, said Bloomberg News citing the country’s vice president Ndaba Gaolathe.
The country, whose diamond partnership with De Beers has built one of Africa’s wealthiest economies per capita, is looking to expand its role in the business as Anglo American moves to offload its 85% holding, said the newswire.
President Duma Boko had earlier signalled Botswana wanted outright control, though officials have since suggested a smaller increase to the government’s existing 15% stake could suffice.
Speaking at a Chatham House event in London on Thursday, Gaolathe rejected suggestions that Gaborone might stretch itself too thin financially. “I can assure you that Botswana as a government, the Ministry of Finance, is not reckless and careless,” he said. “We’re very particular about how we invest.”
Anglo is offloading De Beers during one of the diamond market’s worst slumps, driven by growing demand for lab-grown stones and weaker Chinese luxury spending. Diamonds, discovered in Botswana in 1967, have underpinned the country’s growth ever since, but the current downturn has pushed the economy into recession, said Bloomberg.
A consortium fronted by former De Beers boss Gareth Penny has emerged as preferred bidder, with Anglo reportedly negotiating a sale price near $1bn — far below the unit’s past valuation, Bloomberg reported in July citing sources.
Gaolathe said Botswana, keen to advance further in diamonds, was also pursuing other revenue streams. The country remains the top producer of rough diamonds by value, which account for most of its foreign currency earnings and roughly a third of state revenue. “We have no choice to diversify or we perish,” he said.
