BOTSWANA wants a controlling interest in De Beers, further complicating Anglo American’s efforts to divest of the diamond producer, according to a report by the Financial Times this week.
Botswana’s mines minister Bogolo Kenewendo told the newspaper President Duma Boko “remains resolute in his quest” to increase Botswana’s stake in De Beers. This was to “ensure Botswana’s full control over this strategic national asset and the entire value chain including marketing”, said Kenewendo.
Boko said recently that De Beers – which obtains most of its diamonds from Botswana – was not selling enough diamonds. “Maybe we should take over and sell them ourselves,” he said. Boko’s remarks complicate efforts by Anglo American to sell its 85% stake in De Beers. Bids for the stake are expected in early August, the newspaper said.
Kenewendo warned that any disposal by Anglo of De Beers “without our support will be difficult to achieve”. She also criticised Anglo for failing to manage the process “transparently or in co-ordination with the government”.
Botswana presently holds a 15% stake in De Beers and owns half of Debswana, the joint venture that supplies the majority of the company’s diamonds.
Anglo’s proposed disposal of De Beers coincides with a significant downturn in diamond markets, driven by competition from laboratory-grown alternatives and reduced demand from key markets including China. This slump has resulted in De Beers accumulating its largest diamond stockpile since the financial crisis.
Analysts question whether Botswana has the firepower to bid for De Beers amid expectations of a 7.5% budget deficit next year, but Kenewendo told the Financial Times funding “is not an issue”.
