Botswana bailing out the most iconic company founded in South Africa

Botswana’s President, Duma Boko, said his country will double its stake in De Beers to 30%, a move that could pave the way for Anglo American to finally exit the iconic diamond miner.

The company has long been the cornerstone of the African nation’s economy, and reaching an agreement for Botswana to increase its 15% stake is a key step in a takeover bid by a group led by former De Beers CEO Gareth Penny, Bloomberg reported last month. 

Botswana will become the “single largest shareholder” in De Beers, Boko said Monday in an address to parliament in the capital, Gaborone.

With that “comes greater influence in the strategic decisions” for years to come, he said, adding he was announcing “a new chapter in Botswana’s diamond story.”

Anglo is selling its 85% interest in De Beers as part of a radical restructuring announced in May 2024 as it was fending off a takeover attempt by BHP Group.

De Beers’ most important mines are located in Botswana and are held through a 50/50 joint venture with a state-owned company called Debswana.

Global Diamond Consortium — a vehicle headed by Penny — emerged in July as Anglo’s preferred bidder for the storied miner. However, securing support from Botswana was always going to be essential to any successful deal.

Penny’s consortium includes some of De Beers’ largest customers, as well as the governments of Namibia and Angola, which are also significant diamond exporters.

“For the first time, the great diamond producing nations of our region will sit together at the ownership table of the company that markets their diamonds,” Boko said in a speech which was attended by De Beers CEO Al Cook.

The president didn’t expand on how many shares Namibia and Angola will hold.

Bloomberg reported last month that luxury giant Richemont and US retailer Signet Jewelers were also in talks to join the investor group.

The GDC said Monday that Oman was also part of its consortium.

“We remain focused now on finalising agreements with Anglo American as soon as possible,” the GDC said in a statement following Boko’s announcement. 

While Boko initially said that Botswana intended to pursue a majority stake in the company, the focus shifted in recent months towards boosting the state’s minority holding.

Despite some signs of recovery in recent months, a prolonged crisis in the diamond industry has complicated Anglo’s efforts to offload De Beers.

Anglo has discussed selling De Beers for about $1 billion, Bloomberg News reported in July.

That’s just a fraction of what the diamond business was once worth.

Boko has been vocal in his criticism of lab-grown stones — which have contributed to the lengthy market slump — and often says they don’t deserve to be called diamonds.

“At some point, De Beers seemed to have lost sight of what gives a natural diamond its value,” the president said. “It stopped telling the natural diamond’s story.”