ANGOLA has submitted a bid for a minority stake in De Beers, proposing to establish a pan-African consortium of diamond-producing nations to jointly operate the world-renowned company currently being sold by Anglo American.
The Financial Times reported that Endiama, Angola’s state-owned diamond producer, had made a “fully financed offer”, seeking to create a partnership that would also involve Botswana, Namibia, and South Africa.
“Our bid is designed to foster a partnership in which Botswana, Namibia, South Africa and Angola all participate meaningfully,” said Angola’s mineral resources minister Diamantino Pedro Azevedo. The consortium would preserve De Beers’ “independence and international competitiveness,” he added.
Angola’s proposal complicates an already complex sale process, with Botswana’s President Duma Boko recently declaring his country’s intention to secure majority control of De Beers by October’s end, said the Financial Times. Botswana currently holds a 15% stake in the diamond giant.
Anglo American, which owns 85% of De Beers, valued the company at $4.9bn in February, though banking sources suggest the challenging market conditions may force acceptance of significantly lower offers.
The diamond industry faces substantial headwinds from laboratory-grown alternatives and reduced demand from key markets including China.
Angola recently removed Russia’s Alrosa from its mining operations, subsequently selling the Russian company’s stake in Angola’s fourth-largest diamond mine to Omani investors.
Industry consultant Robert Wake-Walker told the newspaper Angola’s approach was sensible owing to the country’s rapidly expanding diamond output. “There’s no denying that the volume of diamond carat output from Angola is only increasing. It’s one of the fastest growing diamond producing countries,” he said.
The bid would make them a “passive minority shareholder with limited management rights, with a view to selling their portion of diamonds when and if those mines are up and running”, he added.
Botswana president Duma Boko said earlier this week his government was negotiating with Anglo American whilst also discussing financing arrangements with Oman’s sovereign wealth fund and other potential partners.
“We are more than ready for the transaction and we’ve said the transaction must be concluded by the end of October,” Boko said during a Bloomberg Television interview in New York. “It’s a matter of economic sovereignty for Botswana.”
The acquisition push comes as Botswana grapples with severe economic pressures caused by plummeting diamond sales. The precious stones account for 80% of export revenues and approximately one-third of government income, making the nation particularly vulnerable to market fluctuations, said the newswire.
