Government shuns more shares in De Beers

  • De Beers, Government to start negotiations
  • Indian tycoon gets more shares
  • De Beers readies for end of diamonds
  • De Beers to monopolise synthetic diamonds


Minister of Mineral Resources, Green Technology and Energy Security Eric Molale said government will not increase its 15 percent stake in mining conglomerate De Beers. Government will soon start negotiations with De Beers for the sales agreement contracts and mining licenses between De Beers and Botswana that end in 2020 and 2029 respectively.
Industry experts say it would be wise for Botswana to increase its stake in de Beers so as to also benefit from the commercial operations of De Beers, such as Forever Mark, a retail operation that sells diamond jewellery.
Molale said that government makes more money under the current arrangement with De Beers and will not be buying more shares in De Beers. This publication sought to establish whether at its negotiations, government will increase its stake in De Beers, which will increase government’s benefit in De Beers owned companies and synthetic diamonds operations.
De Beers this month also announced its increased venture into Synthetic Diamonds, an operation in which De Beers invested US94 million and will be producing 500 000 carats of lab grown diamonds annually. Market watchers believe that De Beers wants to use its industry prowess to also monopolise the artificial diamond business.
In the past, government declined to acquire more shares in DeBeers. Then, Botswana had pre-emptive rights to increase its stake which would have made the country’s voice stronger within the DeBeers board. That has not however changed. From the De Beers synthetic diamonds operations, and other retail businesses, government will only benefit indirectly, from its 15 percent share in De Beers, despite the eminent threat of depletion of natural diamonds.
David Prager,  Executive Vice-President, Corporate Affairs at De Beers, mentioned in an interview that De Beers is willing to listen to government to hear what Botswana wants out of the De Beers partnership.
Anglo American is the largest majority shareholder in De Beers, with 85 percent. Indian businessman, Anil Agarwal is the largest benefactor within Anglo. He retains a combined total interest of about 19.35 percent in the Company shares through his company, Volcan Holdings II plc.