Botswana seeks control of De Beers

Botswana is pushing to take control of De Beers as Anglo American (LSE: AAL) prepares to sell the diamond company.

Duma Boko, president of Botswana, is determined to increase the southern Africa country’s stake in De Beers because of its importance to the economy, mining minister Bogolo Kenewendo told the Financial Times on Wednesday. The country which supplies more than 70% of De Beers’ stones, would need to approve the sale but the process so far hasn’t been transparent, she said. 

The comments come ahead of an early August deadline for bids to be submitted to Anglo from potential buyers of the diamonds business. Anglo said it remains in regular talks with Botswana and acknowledged the country’s role as a key partner.

De Beers, the world’s leading diamond producer by value, has been on the chopping block since May 2024, when Anglo announced plans to either sell the unit or launch an initial public offering (IPO). This decision came as part of a corporate overhaul triggered by Anglo’s successful defence against a £39 billion (US$49 billion) takeover bid by Australian rival BHP (ASX: BHP).

Financing 

The country’s bold statement poses a challenge to Anglo’s strategy of either selling or publicly listing its 85% De Beers stake. Still, Botswana faces a widening budget deficit, expected to hit 7.5% by 2026, and analysts are skeptical over its ability to raise sufficient funds. Kenewendo insisted that financing isn’t an issue.

Shares of Anglo American rose 0.3% to close at £23.47 apiece in London on Wednesday, valuing the company at £27.6 billion.

De Beers has struggled amid falling demand from China and growing competition from lab-grown stones. Anglo has twice cut De Beers’ valuation, most recently to US$4.1 billion in February. The miner also reported a 44% revenue drop in the first quarter and is holding US$2 billion in unsold diamonds.