Forbes Article on Botswana and De Beers

Forbes 3 August 2025. Tim Treadgold

Note this quote about the outlook for recovery in the diamond market: “It is possible that the government of Botswana is misreading the seriousness of the situation facing the diamond mining industry, just as big diamond mining companies such as Anglo American have done for the past few years, unwilling to accept that lab-grown gems have captured the market and there is unlikely to be a recovery.”

Botswana Muddies Anglo American’s Plan To Sell De BeersBe careful what you wish for is one of the world’s oldest sayings and never truer than in the case of Botswana, a small southern African country keen to take full control of the De Beers diamond business during a diamond price crash.Already a 15% owner of De Beers, Botswana says it wants full control of the business which has dominated the diamond trade for more than century.It could get what it wants as London-based Anglo American, the majority owner of De Beers, runs a sales process as part of a corporate simplification program launched to beat off a takeover bid from arch-rival, Australia’s BHP Group.Selling De Beers is proving to be a complex process thanks to a steep fall in the value of natural (mined) diamonds which have been blitzed by cheap but identical laboratory grown gems.Anglo American has made a series of De Beers asset value write-downs to currently value the business at $4.9 billion but it is not expected to attract a price anywhere near that in the sales process which started last month.Further clouding the future of De Beers is a breakdown in its relationship with Botswana, the world’s second biggest producer of high-quality diamonds after Russia.Botswana’s Bruised BudgetFalling prices and reduced output has bruised Botswana’s budget which is heavily reliant on diamond income.Financial pressure from the diamond crash sparked an outburst from Botswana’s president, Duma Boko last month in which he accused De Beers of not doing its job of promoting diamonds, provocatively saying of Botswana’s diamonds that “maybe we should take control and sell them ourselves”.The comment might have been rhetorical to prod De Beers into doing more to fight the flood of lab-grown diamonds.But the remark was also taken by seriously some diamond industry observers who questioned whether

Botswana really could take control of De Beers, a worrying situation given the delicate sales process being conducted by Anglo AmericanIt remains to be seen whether a threat by Botswana’s president to take control of the country’s diamond industry will dissuade potential bidders or whether he was suggesting that Botswana itself buy Anglo American’s 85% stake, a heavy lift for the small country which is under financial pressure.Citigroup, a U.S. bank, said last month that the diamond price crash could force an additional devaluation of the country’s currency, the Pula, on top of an already announced 2.76% decline by the Bank of Botswana in July.Currency DevaluationDavid Cowan, chief Africa economist at Citi was quoted by the Bloomberg news service two weeks ago saying that another devaluation this year could not be discounted while interest rates might also have to be increased.It is possible that the government of Botswana is misreading the seriousness of the situation facing the diamond mining industry, just as big diamond mining companies such as Anglo American have done for the past few years, unwilling to accept that lab-grown gems have captured the market and there is unlikely to be a recovery.

The reality of mined diamonds today is that profitability has dried up, as shown in the $189 million loss posted by De Beers in the six months to June 30.That loss, plus the suggestion that Botswana should take control of De Beers will not have made the business more appealing to potential buyers.It also raises the issue of Botswana being careful about what its wishing for and why proposing to buy De Beers could be a case of trying to catch a falling knife.