De Beers’ Future Uncertain as Anglo American Charts Breakup Course

  • Anglo says it hopes for shareholder approval, especially from Botswana and SA govts
  •  De Beers chief executive Al Cook says “some things will not change”
  • President Masisi: “Without Botswana, De Beers doesn’t exist”
  • Leading economist Obuseng: “It will have significant implications for Botswana




Anglo American has announced its intention to dismantle its operations following its rejection of a £34 billion bid from rival, BHP Billiton.

The UK mining giant has revealed plans to divest or demerge significant segments, including its prestigious De Beers diamond operation and platinum division.

The decision, according to Anglo American, stems from a desire to streamline its focus on key sectors such as copper, premium iron ore, and crop nutrients.

Despite rebuffing two bids from BHP Billiton, Anglo American unveiled its strategy, hoping for shareholder approval, including the governments of Botswana and South Africa.

De Beers sees new opportunities

In a statement released to shareholders, Anglo articulated its intention to explore various options to separate the De Beers business, stating: “De Beers to be divested or demerged to improve strategic flexibility for both De Beers and Anglo American.”

In response, De Beers Group reaffirmed its commitment to its ongoing strategy and value creation for stakeholders. CEO Al Cook emphasised the company’s century-long leadership in the diamond industry, expressing confidence in maintaining its position as the industry leader.

Cook highlighted De Beers’ global presence, unique sales model, and iconic brand that has become synonymous with diamonds.

Botswana watching “closely”

He stated in a statement: “Today’s announcement from Anglo American opens up new possibilities under new ownership. But some things will not change. We will continue to deliver value for all our stakeholders.”

Regarding the proposed strategic transformation, Cook remarked: “Later this month, we will present the new strategy for De Beers. Diamonds remain some of the most desired products around the world, and I am excited by the opportunity we have to bring their magic to a new generation.”

CNBC Africa last week reported that Botswana, the world’s leading diamond producer, says it is closely following BHP Billiton’s battle to buy Anglo American which controls their diamond venture through De Beers.

Debswana the largest diamond producer

The publication noted that President Mokgweetsi Masisi told them at the US-Africa Business Summit in Dallas, Texas that while no-one had approached Botswana about the matter, the government would defend its interests in De Beers in which it owns 15 percent.

De Beers and the Botswana Government jointly co-own Debswana Diamond Company, the largest diamond producer in the world by value.

“The value of De Beers is fundamentally created by Botswana. Without Botswana, De Beers doesn’t exist,” the publication quoted President Masisi as saying.

Meanwhile, the unfolding matter has not escaped the scrutiny of economic observers who foresee far-reaching implications for Botswana and beyond.

“It can be very disruptive”

Economist Sennye Obuseng, drawing from a wealth of experience that tenure as a lecturer in economics at the University of Botswana, has cautioned against underestimating the issue’s complexity and potential fallout.

Highlighting concerns over economic growth, employment and government revenue, Obuseng underscores the disruptive nature of the impending transition.

“Due to its magnitude, there is significant anti-trust interest across a multiplicity of jurisdictions,” he said in an interview.

“However, assuming it goes through (Anglo’s plan to disinvest in De Beers), it will have significant implications for Botswana.

“In the short term, it creates unhealthy uncertainty about the likely impacts on the economy, the core concerns being how it will affect economic growth, employment and government revenue. It can be very disruptive.”