Diamond crash, De Beers is about to be "sold to Africa."

The ownership of the global diamond giant De Beers is entering a historic turning point! As the global diamond market suffers a cold winter due to weak demand and the impact of lab-grown diamonds, its majority shareholder Anglo American is accelerating its sale plan, and the final buyer is highly 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 said, 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 smooth," and it is "almost certain" that the Botswana government will obtain a larger ownership share in the company.

The report states that the deal is at the final stage of the second round of bidding, and the buyer is "most likely to be a consortium" jointly formed by governments 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.

Impacted by intensified competition from lab-grown diamonds and multiple factors such as the US imposing tariffs on polished diamonds from India, Anglo American issued a warning this month that it may be forced to write down De Beers’ asset value for the third consecutive year. Although analysts question whether the market is currently at its bottom, Anglo American management insists that divesting this struggling diamond asset is the best way to safeguard shareholder returns.

Multiple Governments Compete for Diamond Assets

The Botswana government holds a pivotal position in this sales contest. According to reports, the country currently holds 15% of De Beers’ shares, and its President Duma Boko has openly expressed his hope to increase the shareholding.

Wanblad stated directly, Botswana is "the key factor here, because they are the crucial shareholder of this business." Once Anglo American determines its preferred bidder, the company will not only need to negotiate terms with the buyer (individual or consortium), but also must reach an agreement with the Botswana government.

The report points out that this special shareholding structure means that any decisions about De Beers’ future cannot bypass the will of Gaborone (Botswana's capital).

Besides Botswana, other African diamond-producing countries are also actively seeking a share in the industry giant, promoting further transfer of ownership towards the African continent.

According to the report, during this week's Indaba Mining Conference in South Africa, Angolan government officials stated that the country is interested in acquiring 20% to 30% of De Beers.

Meanwhile, according to insiders, Namibia, which is responsible for about one-tenth of De Beers’ diamond production, is also considering whether to bid for a minority stake.

Analysts believe that this situation involving multiple governments confirms that the final buyer is highly likely to be a consortium in a "public-private partnership" form.

Diamond Market Facing a Perfect Storm

De Beers’ predicament reflects the severe challenges facing the entire natural diamond industry.

In addition to the structural substitution threat from inexpensive lab-grown diamonds and the blow to demand from luxury spending, the US’s import tariffs on India (a major diamond polishing center) further obstruct trade flows, causing raw materials to be unable to "move as naturally as before."

Given that the "difficult" market environment continued to worsen last year, Wanblad admitted that the final timeline for the sale will "mainly depend on the timing of financing."

Despite analysts’ criticism that selling assets at the market's low point may cause value loss, Anglo American’s intention to divest is firm. Wanblad emphasized that the company must focus on business that creates the best returns for shareholders, "and that does not include continuing to hold De Beers."

Moreover, in the annual results to be announced next week, De Beers faces asset impairment risks, which further highlight the urgency of Anglo American’s divestment of the asset.

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