De Beers Up for Grabs: Botswana Eyes Bigger Slice of Diamond Giant

Diamonds may be forever, but Anglo American’s grip on De Beers seems to be loosening. The Botswana government, a key player with a 15% stake in the diamond giant, is eyeing a potentially bigger piece of the pie as Anglo weighs a spin-off or sale.

“This could be the best thing that happens,” said President Mokgweetsi Masisi in a recent interview with JCK News, referring to Anglo’s potential De Beers divestment. Botswana boasts a hefty 70% share of De Beers’ annual rough diamond supply, making the government a crucial partner.

Masisi emphasized Botswana’s interest in acquiring a larger stake, but only “if it’s attractive,” he cautioned. This strategic move comes amidst Anglo’s radical business review, a shake-up driven by a desire to fend off a takeover from rival BHP Group. Diamonds seem to be the glittering oddity out, as Anglo sets its sights on copper, iron ore, and a fertilizer project in the UK.

But diamonds still hold a special allure for Botswana. “We will defend our interests in the diamond miner,” Masisi declared to CNBC Africa in May. This unwavering commitment extends to choosing the right partner for De Beers’ future.

“An ideal partner would be a long-term investor,” Masisi stressed to JCK News. Botswana is wary of “bad guys” – those with fleeting interest, prioritizing short-term gains over long-term sustainability. “This industry has its ups and downs,” the President explained, “We need someone in it for the haul.”

The global diamond market has experienced its fair share of downs recently, with slumping demand impacting prices. De Beers has responded by strategically limiting supply and offering flexibility to established customers. In February, the ripples of this market shift were felt by Anglo, who announced a $1.6 billion impairment charge on De Beers.