IT would be a “mistake” for Anglo American to sell De Beers “at a deep discount in the midst of the diamond market lull”, a prominent diamond analyst told the Financial Times on Tuesday.
aul Zimnisky, an independent diamond analyst, said the UK-listed miner, which owns 85% of De Beers could “afford to wait a couple more years in order to get a fair price”, especially as it had already sold its metallurgical coal and nickel assets for good value.
His comments come as Botswana’s president Duma Boko launched a fierce attack on the planned sale, threatening to seize “full control” of De Beers. In July, Boko declared De Beers was “broke” and accused De Beers of “not doing its job”, suggesting the government should “take over and sell them ourselves”.
The southern African nation, which holds a 15% stake in De Beers and has pre-emptive rights over its sale, has said it could end up buying the diamond miner and marketer.
Botswana’s mining minister told the Financial Times last week that the country is serious about converting its stake into complete ownership of what she called a “strategic national asset”.
However, Kieron Hodgson from Peel Hunt said Botswana’s acquisition of De Beers “seems far-fetched and improbable” given the government’s fiscal constraints. Botswana’s foreign currency reserves have fallen to $3.5bn from $4.8bn a year earlier, said the Financial Times.
The country previously declined to increase its De Beers stake in 2011 due to budget concerns, missing an opportunity when the Oppenheimer family sold their 40% holding, the newspaper said.
Anglo American is under pressure to sell De Beers quickly as part of restructuring efforts following last year’s hostile takeover attempt by BHP. More than 10 parties have expressed interest in the unit, including former De Beers executives Gareth Penny and Bruce Cleaver.
The diamond market has been hammered by competition from laboratory-grown alternatives and slumping demand in key markets including China and the United States, with De Beers’ revenue halving between 2022 and last year.
Peel Hunt’s Hodgson said that for Anglo, a sale price of about £1bn “would be a result” given current market conditions.
