Diamond crash, De Beers is going to be "sold to Africa"

The ownership of global diamond giant De Beers is undergoing a historic turning point! As the global diamond market plunges into a winter due to weak demand and the impact of synthetic diamonds, its majority shareholder Anglo American is accelerating its sale plan, with the final buyer likely to be a consortium composed of African sovereign governments and private capital. On February 9, according to the Financial Times, Anglo American CEO Duncan Wanblad stated, despite the continued deterioration of the diamond market, the company still hopes to complete the sale of De Beers within this year. He revealed that the sale process is "relatively progressing smoothly," and it is "almost certain" that the Botswana government will gain a larger ownership share in the company. The report indicates that this transaction is nearing the end of the second phase of bidding, and the buyer "is likely to be a consortium" composed of government and private entities. In addition to Botswana, the Angolan government has expressed interest in acquiring 20-30% of the shares, and Namibia is also weighing whether to bid for a minority stake. Due to intensified competition from synthetic diamonds and multiple factors such as the U.S. imposing tariffs on polished diamonds from India, Anglo American has issued a warning this month that it may be forced to write down the value of De Beers' assets for the third consecutive year. Although analysts question whether this is the market bottom, Anglo American's management insists that divesting this struggling diamond asset is the best path to ensure shareholder returns. Multiple Governments Compete for Diamond Assets The Botswana government plays a crucial role in this sale game. Reports indicate that the country currently holds a 15% stake in De Beers, and its president Duma Boko has publicly expressed a desire to increase the shareholding ratio. Wanblad stated, Botswana is "the key decision-maker here because they are a key shareholder in the business." Once Anglo American identifies its preferred bidder, the company will not only need to negotiate terms with the buyer (individual or consortium) but must also reach an agreement with the Botswana government. The report points out that this special equity structure means that any decisions regarding the future of De Beers cannot bypass the will of Gaborone (the capital of Botswana). In addition to Botswana, other African diamond-producing countries are also actively seeking to share in this industry giant, pushing for ownership to further shift to the African continent. The report states that during the Indaba mining conference held in South Africa this week, Angolan government officials indicated that the country intends to purchase 20% to 30% of De Beers' shares. Meanwhile, sources revealed that Namibia, which is responsible for about one-tenth of De Beers' diamond production, is also weighing whether to bid for a minority stake. Analysts believe that this situation of multiple governments intervening confirms that the final buyer is likely to be a consortium appearing in the form of "public-private partnership." The Diamond Market Faces a Perfect Storm De Beers' predicament reflects the severe challenges facing the entire natural diamond industry In addition to facing the structural substitution threat from cheap lab-grown diamonds and the impact of luxury goods spending on demand, the import tariffs imposed by the United States on India (the main diamond polishing center) have further hindered trade flows, causing raw materials to not "flow as naturally as before." Given that the "difficult" market environment continued to deteriorate last year, Wanblad acknowledged that the timeline for completing the sale will "largely depend on the timing of financing." Despite analysts criticizing that selling assets during a market low could lead to value loss, Anglo American plc is determined to proceed. Wanblad emphasized that the company must focus on creating the best returns for shareholders, "and this does not include continuing to hold De Beers." Furthermore, the asset impairment risk that De Beers faces in the annual results to be released next week further highlights the urgency for Anglo American plc to divest this asset