As Anglo American faces restructuring woes, the sale of its 85-percent stake in international diamond giant De Beers is drawing keen interest from Angola, reports Lusa.
Two months ago, the Angolan government announced its interest in acquiring a strategic minority stake, proposing a pan-African consortium with other diamond producers like Botswana, Namibia and South Africa. This united African front would prevent De Beers falling into “speculative hands” that might “not treat natural diamonds properly,” Angolan Secretary of State for Mineral Resources Jânio Corrêa Victor told the press in late October. “It would be healthier for us if the four countries formed a front,” he explained. “This would have a major impact on the global diamond market.”
Shortly before Victor’s comments, Angola’s state-owned diamond company Endiama raised its bid to include the entire 85-percent stake held by Anglo American. The ambitious bid sets up a potential
standoff with Botswana, which is also seeking control of the multinational.
[See more: Landmark diamond discovery may reshape Angolan mining sector]
Botswana accounts for 70 percent of De Beers’ annual rough diamond production and already holds a 15-percent stake through its Debswana joint venture. Anglo American CEO Duncan Wanblad told the Financial Times in early October that Botswana’s government would join negotiations with shortlisted bidders.
At least six consortia have expressed interest and Wanblad welcomed Angola’s interest as “positive news”. “We’re taking all of this into the mix and working through what’s best for the business, for Anglo, and for Botswana,” he told FT. Later that month, Endiama CEO José Manuel Ganga Júnior expressed optimism about reaching an understanding with Botswana, although he did not specify to Bloomberg whether any discussions had taken place.
As a current shareholder, Botswana has the right to match any external offers for the De Beers stake. Mining Technology reported in late October that the country’s relevant minister, Bogolo Kenewendo, had not responded to enquiries regarding Angola’s new bid.
De Beers currently carries a book value of US$4.9 billion, although industry analysts expect it to fetch US$3-4 billion due to various factors, including the current state of the global diamond market. With funding from the national budget off the table, Endiama must secure independent financing.
