Botswana president reiterates plan to buy majority of De Beers
Botswana’s president reiterated his plan to acquire a majority stake in De Beers, as Anglo American Plc looks to offload its controlling interest in the iconic diamond company.
“Government will leverage a majority stake,” Duma Boko said Monday in an annual address in Botswana’s capital, Gaborone. “Concrete steps are under way towards the acquisition of Anglo-American shares in De Beers.”
Anglo is divesting its 85% shareholding in De Beers, as part of a sweeping restructuring that began almost 18 months ago. Botswana, which owns the rest of the company, relies on diamonds for about 80% of its exports.
London-listed Anglo is selling De Beers amid a prolonged slump in the diamond market, with fierce competition from cheaper lab-grown stones. Most of the company’s diamonds are mined in Botswana, which has been hammered by the downturn. Still, gems remain pivotal to the economy, according to the president.
“While this administration is pushing for diversification of the mining sector, diamonds will continue to be a main contributor of economic growth and transformation for our country,” Boko said.
The president told Bloomberg in September that he wanted to conclude a deal for the state to buy a majority interest in De Beers by the end of October. He said Botswana was in talks with a number of parties, including a sovereign wealth fund in Oman, to help fund any acquisition.
However, Botswana faces competition for the De Beers stake. The chief executive officer of Angola’s state-owned diamond producer Endiama EP told Bloomberg last month that his company had offered to buy Anglo’s entire stake.
Following a meeting last week of the two countries’ minerals ministers in Gaborone, the Angolan official said both nations were “perfectly aligned” on De Beers and focused on reviving demand for natural stones.
Investor groups led by former De Beers executives have also shown interest in buying the diamond giant since a formal sales process kicked off in June.
(By Mbongeni Mguni and William Clowes)
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