Botswana’s president, Duma Boko, has reaffirmed the country’s commitment to acquiring a majority stake in De Beers, currently majority-owned by Anglo American, despite warnings from the International Monetary Fund (IMF) about the potential economic risks involved.
The Southern African nation already holds a 15% stake in De Beers. It has indicated its intention to expand that holding following Anglo American’s announcement that it plans to divest from the diamond business.
Government Plans and Rationale
Speaking in Kanye, President Boko dismissed the IMF’s advice, saying Batswana would make the decision based on the country’s needs. He stated that Botswana’s heavy contribution to De Beers’ production — reportedly supplying 70% of its rough diamonds — justifies a greater stake and more direct control.
“When we take it, we will get the operations back to the right state and bring the headquarters here,” Boko said. He added that Botswana should reflect its diamond production role through increased domestic control and visibility of the industry.
He emphasised the government’s position: “It’s our people who are running this country, and we said we want De Beers, and we are going to take it.”
IMF Concerns About Economic Risk
In its Article IV consultation report, the IMF warned that Botswana’s pursuit of a majority stake in De Beers could expose the country to further fiscal vulnerability, citing existing high dependence on diamonds and a deteriorating economic outlook. The Fund pointed to weakened global demand for natural diamonds, which has contributed to a sharp contraction in Botswana’s economy and an increase in both fiscal and current account deficits.
“Botswana’s economic outlook has deteriorated markedly over the last 12 months,” the IMF stated, noting that the demand downturn has been “sharper — and is expected to be more persistent — than anticipated.”
The report urged the government to focus on economic diversification and to consider the long-term implications of increasing exposure to the diamond sector at a time when the global market remains uncertain.
Sale Process and Other Interested Parties
Anglo American, which currently owns 85% of De Beers, has initiated the sale process. Alongside Botswana, other governments in the region, including Angola and Namibia, have shown interest in acquiring a stake in the diamond company. However, no official bids or agreements have been made public.
Implications for the Jewellery Industry
Botswana’s bid to take majority ownership of De Beers may result in changes to the company’s governance and operational structure. If the headquarters move to Botswana, this could affect internal decision-making processes and have implications for the supply chain, including diamond sourcing, processing and trade logistics.
For jewellers, changes in ownership and the possible relocation of De Beers’ headquarters may affect rough diamond supply, pricing structures and long-term agreements. The government’s focus on ownership and local processing reflects a broader move in the region toward retaining more value from mineral resources, which could result in expanded in-country processing expectations.
These developments come at a time of reduced demand for natural diamonds and increasing market presence of lab-grown alternatives. Changes at De Beers could influence sourcing practices across the industry.
