In a sign of escalating tensions between the Botswana government and Anglo American, the parent company of diamond giant De Beers, Mining Minister Peggy Serame (formerly Bogolo Kenewendo) announced that the country is seeking to increase its stake in De Beers, aiming for greater control over this strategic asset—including its value chain and marketing operations.
The minister’s statement comes ahead of an August deadline for bids to acquire De Beers, signaling a shift in Botswana’s approach from being a minority shareholder to aspiring to dominate a company that extracts the majority of its diamonds from Botswana’s territory.
Currently, Botswana owns 15% of De Beers and holds a 50% stake in Debswana, the joint venture that forms the backbone of the country’s diamond production.
Accusations of Lack of Transparency
Minister Serame accused Anglo American of failing to coordinate with the government during the sales process, stressing that any deal struck without official backing would be “difficult to implement.” She added that the British partner had “failed to manage the process transparently”, highlighting growing friction between the two sides.
Anglo American is under mounting pressure to divest from De Beers this year as part of a broader restructuring plan following its rejection of a £39 billion takeover bid from BHP in 2023.
Global Diamond Market in Decline
The potential sale coincides with a sharp global downturn in the diamond market, driven by increasing competition from lab-grown diamonds and falling demand in key markets such as China. This has led to an unprecedented buildup of De Beers’ inventory, the largest since the 2008 global financial crisis.
Financial Hurdles and Strategic Ambitions
Although the Botswana government has asserted that funding will not be an obstacle, analysts have questioned the country’s capacity to raise the necessary capital, especially amid forecasts that its fiscal deficit could reach 7.5% by 2026. The nation’s economy remains heavily dependent on diamond exports.
To address its growing budget shortfall, Botswana recently secured a $300 million loan from the African Development Bank, underscoring the financial pressures the country is facing—even as it retains a rare investment-grade credit rating in Africa and has limited experience borrowing on global markets.
This push to gain a larger stake in De Beers reflects Botswana’s evolving strategy toward its natural resources: asserting greater sovereignty and control, while navigating the challenges of a changing global diamond industry and volatile economic landscape.
