Botswana and a group leading the race to buy De Beers are near an agreement on their future ownership stakes in the diamond miner, potentially paving the way for Anglo American Plc to finally exit the business.
Global Diamond Consortium — a vehicle headed by former De Beers Chief Executive Officer Gareth Penny — emerged in July as the preferred bidder for the miner. Yet coming to an agreement with Botswana, where De Beers’ most important mines are based and whose government holds a 15% stake in the company, had remained a hurdle to any deal.
The consortium and Botswana are now nearing an agreement on the size of what their stakes will be, according to people familiar with the matter, who asked not to be identified as the talks are private. While the precise details aren’t clear, the agreement is likely to see Botswana increase its stake to around 25%, some of the people said. Still, talks are ongoing and an agreement has not been finalized.
GDC also includes Namibia and Angola — two of the largest diamond producing nations — and Anglo has discussed selling De Beers for about $1 billion, Bloomberg reported in July. That’s just a fraction of what De Beers was once worth.
Anglo, GDC and Botswana’s presidential office declined to comment.
Anglo has been looking to sell the one-time diamond monopoly since it fended off an almost $50 billion approach from BHP Group in early 2024, but the process has been stymied by a crisis in the diamond market. Anglo has taken three impairments on the business in just three years, lowering its carrying value for the unit to $2.3 billion in February.
Botswana’s government in July said that Anglo had selected GDC as the preferred bidder from the interested parties. GDC is led by Penny, Bloomberg reported at the time.
Should an agreement between Botswana and GDC progress, the country, Angola and Namibia will together hold less than 50% of De Beers, the people familiar with the matter said. That would see De Beers remain under the control of private investors, a key condition for some of the consortium backers.
Accepting a larger yet still minority stake would mark a departure from previous remarks by Botswana President Duma Boko, who had said the country wanted majority control of De Beers. Last month, Vice President Ndaba Gaolathe told Bloomberg TV that “whatever the number is, it is more than 15%,” when asked about what size shareholding the state is seeking.
For Anglo, an agreement would allow the potential sale to progress to the final stages, clearing one of the final obstacles for a process that has dragged on for more than two years.
The move to sell De Beers came in the midst of one of the diamond industry’s deepest and most prolonged crises that has seen prices plunge. After bumper sales during the pandemic, the sector was already weakening when it was hit by a collapse in Chinese luxury spending. The rising popularity of synthetic stones, trade tensions and sudden geopolitical shifts have added more pain.
Still, the market has shown some signs of recovery in recent months, making the timing of any deal potentially beneficial for the bidders. There will also be additional payments based on the performance of the business after the sale completes, Bloomberg has reported.
Botswana also holds a 50% interest in Debswana, its mining joint venture with De Beers that produces most of the country’s diamonds.
(By William Clowes and Thomas Biesheuvel)
