Angola Proposes to Buy Anglo American’s 85% Stake in De Beers

Angola’s Proposal to Acquire De Beers Stake from Anglo American

Angola has entered the race to acquire Anglo American’s 85% stake in De Beers, the world-renowned diamond company. The state-owned Angolan gem producer, Endiama, has formally submitted a proposal to Anglo American. This move is part of Angola’s broader strategy to secure a more significant position in the global diamond market.

The talks surrounding the potential sale have stirred interest from various parties, including Botswana, which currently holds a 15% stake in De Beers. Botswana’s government has voiced strong interest in increasing its share, calling the acquisition a matter of “economic sovereignty.” However, Angola’s approach marks a shift from its previous strategy of seeking only a minority stake.

Endiama’s Strategic Move to Boost Angola’s Diamond Industry

Endiama, led by CEO José Manuel Ganga Júnior, sees acquiring De Beers as an opportunity to harness the company’s advanced mining technology and robust marketing systems. Angola has long been a significant player in the diamond industry, but its resources have remained underdeveloped compared to global leaders. By controlling a majority stake in De Beers, Angola could enhance its position within the global diamond supply chain and improve its export revenues.

Angola’s proposal follows a divestment process initiated by Anglo American 17 months ago. The company has valued De Beers at $4.9 billion, despite having faced significant impairments totaling $3.5 billion over the last two years. These challenges have, however, not deterred interest from various potential buyers, including investment groups led by former De Beers executives.

The Competition: Botswana’s Interest and Strategic Implications

While Angola is aggressively pursuing the stake, Botswana remains a significant player in the race. The country, which has maintained a strong partnership with De Beers for decades, holds the right to match any external offers for the stake. Botswana’s interest in increasing its current stake in De Beers is not just economic but also political. President Duma Boko emphasized the acquisition as crucial to strengthening the nation’s control over its diamond resources, a key pillar of Botswana’s economy.

The rivalry between Angola and Botswana adds another layer of complexity to this deal, especially as both countries have strategic interests in the diamond sector. If Angola succeeds in acquiring Anglo American’s stake, it could shift the balance of power in global diamond markets, potentially altering the industry’s dynamics in favor of emerging African producers.

SuperMetalPrice Commentary:

Angola’s proposal to acquire Anglo American’s majority stake in De Beers marks a pivotal moment in the global diamond industry. If successful, the deal would enhance Angola’s position in a market historically dominated by Botswana. With both countries vying for control, the sale represents not just a business opportunity but also a matter of national sovereignty and economic strategy. The outcome of this deal could have far-reaching implications for both Africa’s diamond market and the global supply chain.