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In a strategic move to enhance its position in the global diamond industry, Botswana has earmarked 890 million pula ($65 million) for the acquisition of a 24% stake in the renowned Belgian diamond trader, HB Antwerp. The allocation was revealed in national budget documents, signaling the advancement of a deal that President Mokgweetsi Masisi had indicated was in the finalisation stages back in November.
According to calculations by Reuters, the deal places a valuation of $275 million on HB Antwerp, a company established in 2020, which reported $251 million in revenue in 2022 according to its official website.
The transaction was initially brought to light during negotiations for a new sales contract with De Beers in March. As part of the agreement, Botswana committed to acquiring a significant stake in HB Antwerp and supplying it with rough diamonds for a period of five years through the state-owned Okavango Diamond Company (ODC).
During her 2024/25 national budget speech on 5 February, Finance Minister Peggy Serame did not disclose the specific cost of the HB Antwerp shareholding. However, estimates published on 7 February, as seen by Reuters, indicate a budget allocation of 890 million pula for the venture.
The diamond market has been grappling with challenges in recovering from the impact of excessive inventories in 2023, triggered by weak demand and competition from lab-grown gems. Against this backdrop, Botswana’s move to secure a stake in HB Antwerp reflects a strategic response to navigate the evolving dynamics of the industry.
It is worth noting that the proposed deal faced scrutiny in September when Lucara Diamond Corp, owner of the Karowe mine in Botswana, terminated its sales agreement with HB Antwerp, citing financial irregularities. Despite this, Botswana remains optimistic about the potential benefits of the venture, emphasising the opportunity to capitalise on the downstream aspects of the diamond industry, such as cutting and polishing. President Masisi has underscored that such opportunities were not as readily available under previous agreements with De Beers.
Botswana and De Beers had previously reached a 10-year diamond sales agreement in June, increasing ODC’s share of Debswana output from 25% to 30%. The agreement outlines a further increase to 40% in five years and a long-term goal of reaching 50% by the end of the contract period. This strategic maneuverer aligns with Botswana’s commitment to maximising its gains from the diamond sector and diversifying its revenue streams in the face of evolving market conditions.
