BOTSWANA is contemplating raising its shareholding in the global diamond miner De Beers, according to President Mokgweetsi Masisi. This comes in response to parent company Anglo American’s announcement of a potential spin-off or sale of the diamond business.
Speaking to JCK News, President Masisi described the possible sale by Anglo American as ‘the best thing’ if it materialises. Currently, the Botswana government holds a 15 percent stake in De Beers, which sources 70 percent of its annual rough diamond supply from Botswana.
‘Anglo’s sale of De Beers would be the best thing if it happens,’ Masisi stated. He further indicated that the government could increase its stake in De Beers ‘if it’s attractive,’ emphasising Botswana’s commitment to defending its interests in the diamond sector.
Anglo American has outlined a comprehensive review of its operations, including the potential divestment of its diamond business, to focus on copper, iron ore, and a fertiliser project in the UK. This strategic shift aims to fend off a potential takeover by its larger rival, BHP Group.
Among the options Anglo is considering is an initial public offering (IPO) for De Beers, as reported by Reuters on May 14. Diamond prices, like other luxury goods, have faced a downturn due to a slump in global demand. De Beers has responded by limiting supply and offering more flexibility to its contracted customers. In February, Anglo announced a $1.6bn impairment charge on De Beers.
Masisi emphasised the need for a long-term investor in De Beers, saying, ‘One of the characteristics of a bad owner is someone who has impatient capital. This industry requires somebody who is in it for the long-haul, because it has its ups and downs.’
He also highlighted Botswana’s intention to keep unsuitable investors out. ‘We want investors whose vision is aligned with the government’s,’ Masisi told JCK News, underscoring the government’s strategy to ensure sustainable and beneficial partnerships.
Anglo American acquired its controlling stake in De Beers in 2011, purchasing the Oppenheimer family’s 40 percent stake for $5.1bn. As the company explores its options, Botswana’s potential move to increase its shareholding in De Beers marks a significant development in the diamond industry.
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