Botswana and the Global Diamond Consortium (GDC) are close to agreeing on their respective ownership stakes in diamond miner De Beers.
GDC, with former De Beers CEO Gareth Penny at the helm, is the preferred bidder for the stake in the miner, according to a report Bloomberg published yesterday. The sale could lead to Anglo American exiting the business, but reaching an agreement with Botswana, home to De Beers’ most important mines and a 15% shareholder in the company, has remained an obstacle to any purchase.
The consortium and Botswana are close to agreeing on the share of the company they each expect to own, according to people familiar with the matter, who asked not to be identified because the discussions were private. While the details remain unclear, Botswana could increase its stake to about 25%, some of the people told Bloomberg. Talks are ongoing, and no final agreement has been reached, the news agency added.
GDC also includes Namibia and Angola, two of the world’s largest diamond producers. Anglo American has discussed selling De Beers for about $1 billion, a fraction of the company’s former value, Bloomberg published earlier this year. The drop in valuation is due to the weakened diamond market.
Botswana said in July that GDC was Anglo’s favored bidder for the miner, according to Bloomberg. In a potential deal, Botswana, Angola and Namibia would together hold a minority stake, leaving De Beers under private-investor control. The arrangement would mark a shift from Botswana’s previous aim of securing majority ownership. An agreement could help advance the sale, which has been underway for more than two years, Bloomberg said.
The industry downturn stems from weaker Chinese luxury spending, the rise of lab-grown diamonds, trade tensions and geopolitical uncertainty. However, the market has shown signs of recovery in recent months, potentially creating more favorable conditions for bidders. The deal will include additional payments tied to the company’s performance after the sale is completed, the media outlet reported.
Botswana also owns a 50% stake in Debswana, its joint venture with De Beers, which produces most of the country’s diamonds.
Image: A De Beers sight box. (De Beers)
