Anglo’s Handling of De Beers Sale Irks Stakeholder Botswana

A De Beers luxury jewelry store in Hong Kong. Photographer: Lam Yik/Bloomberg Photo by Lam Yik /Photographer: Lam Yik/Bloomberg

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(Bloomberg) — Anglo American Plc’s handling of the De Beers sale has angered Botswana, which owns 15% of the diamond producer, because the government believes that it hasn’t been properly consulted, people with knowledge of the matter said. 

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Anglo is selling De Beers as part of a restructuring plan outlined by Chief Executive Officer Duncan Wanblad after the company fended off a takeover approach from BHP Group Ltd. last year.

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The southern African nation is weighing options including buying Anglo’s stake, the people said asking not to be identified because the information is private. The government has appointed advisers from a Swiss firm, the people said, adding that Anglo hasn’t met with Botswana, which has preemptive rights on any deal, to discuss the sale process.

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De Beers is critical for Botswana, the world’s largest diamond producer by value. The precious stones account for most of its exports and about a third of its revenue. The government expects its economy to either stagnate or contract this year due to a protracted downturn in diamond sales.

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“De Beers is not doing its job,” said Botswana President Duma Boko on a visit to Lesotho this week. “The diamonds are ours. Before the end of this year something very drastic in that space will happen.” 

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Anglo is engaging with the government at all appropriate stages of the process, said the company’s spokesperson. 

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Botswana’s government spokesperson referred to the president’s statement when reached for comment. 

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The nation’s Minerals and Energy Minister, Bogolo Kenewendo confirmed that the administration had hired advisers and was working on acquiring an additional stake in De Beers. 

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Botswana also owns 50% of Debswana, which is the main producer of rough diamonds for De Beers. The nation has an investment grade rating, and is in a position to raise the required funds if they chose to buy the company, the people said.

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Under the current shareholder agreement, any sharing of information on Debswana’s assets to third parties needs written consent from the government shareholder, the people said. 

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Any deal that has not been approved by Botswana can be blocked, said the people. 

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—With assistance from William Clowes and Mbongeni Mguni.

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