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Key takeaways

  • Botswana is looking for partners from the Middle East to acquire a majority stake in diamond company De Beers.
  • The strategic move is intended to stabilise the economy by controlling diamond prices.
  • Anglo American is divesting its diamond activities to focus on copper and iron ore.

President Duma Boko has announced that Botswana is pursuing partnerships with Oman and the United Arab Emirates to take over a majority stake in De Beers from Anglo American.

Strategic economic influence

During a recent discussion in Gaborone, Boko stressed that his government is looking for reliable allies, noting that both Middle Eastern countries have positioned themselves as suitable partners for this and other potential ventures.

This strategic move comes at a time when Anglo American is preparing to sell its 85 percent stake in the diamond company. Botswana, which already holds a 15 percent stake, sees this acquisition as a way to gain more influence over the marketing and pricing of rough diamonds. The country’s economy has suffered significantly from a sharp drop in diamond prices, a sector that currently accounts for 25 percent of GDP and 80 percent of all exports.

Regional collaborations

The push for ownership is taking place against a backdrop of financial instability, with Botswana recently facing a credit rating downgrade by S&P Global Ratings. To advance its objectives, the government has also explored possible collaborations with Angola and Namibia.

Anglo American

Anglo American’s decision to divest stems from a broader corporate restructuring following a failed 49 billion dollar takeover attempt by BHP Group. The company is shifting its focus to iron ore and copper, including a planned acquisition of Teck Resources.

In addition, De Beers has been grappling with a challenging market environment characterised by falling demand from China, the rise of affordable synthetic diamonds and volatile trade policy from the United States. This downturn was underscored when Anglo American reduced De Beers’ book value to 2.3 billion dollars this year.

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