Botswana gears up to take over the most iconic company founded in South Africa

Botswana is in talks with the United Arab Emirates and Oman to help the diamond-rich nation acquire a “strategic” stake in De Beers from Anglo American, President Duma Boko said.

Anglo American is in the process of shortlisting bidders for its 85% holding in De Beers.

Boko travelled to Oman earlier this year, after telling Bloomberg in September that his country was in talks with a sovereign wealth fund in the Middle Eastern nation to finance the purchase of a controlling stake in the diamond company.

“We are looking at reliable, trusted partners,” Boko said in an interview in the capital, Gaborone, on Friday.

“The Omanis and the UAE have now claimed that spot. So any opportunity that comes, whether in the diamond space or elsewhere, we will now be looking to engage with them.”

Botswana, which is cash-strapped and had its credit rating cut by S&P Global Ratings this year, is betting that control of De Beers will give it more say over the price and marketing of the gems. 

The country is the world’s largest producer of rough diamonds, and a plunge in prices has ravaged the economy. The gems still generate 80% of the nation’s total exports and a quarter of its domestic gross product.

Anglo wrote down the book value of De Beers to $2.3 billion this year. De Beers mines most of its diamonds in Botswana, which already holds a 15% stake in the company.  

Anglo is selling its stake as natural diamonds come under pressure from cheaper lab-grown stones, weakening Chinese demand and uncertainty caused by US tariffs. 

Botswana has also been in talks with neighbouring Namibia and Angola in its push for control of De Beers.

The sale of the 138-year-old diamond company is part of Anglo’s restructuring plan, after it fended off a $49 billion hostile takeover approach by BHP Group.

Anglo has since refocused on copper and iron ore, and is pursuing a multibillion-dollar takeover of Canada’s Teck Resources. 

Separately, the state-run Botswana Development Corporation said that Dubai-based Albaddad agreed on a $1.9 billion plan to build a new urban project in the southern African nation. 

The UAE firm will provide the bulk of the financing for the project, while the BDC will provide partial funding and hold a 5% stake, the company said in a statement.

BDC will provide land valued at 198 million pula for the project, Managing Director Oteng Keabetswe said.

“We are looking at our coffers at a series of funding activities to increase that holding to 26%,” he said at a briefing on Friday.

Known as New Botswana City, the development will cover 124,000 square meters (31 acres), and include a large convention centre, office towers, residential areas, hotels and a shopping district, BDC said.

The project, which would be one of the largest foreign direct investments in Botswana, will help accelerate Boko’s plans to open the country to business tourism, and add luxury accommodation and shopping capacity in Gaborone.