Botswana wants to take full control of diamond company De Beers

The Botswana government is set to take full control of diamond mining company De Beers, which could end nearly 60 years of cooperation between local authorities and investors in the company, the Financial Times reports.

Botswana's President Duma Boko has said that De Beers is "going bankrupt" and has proposed taking diamond sales under state control. However, experts doubt the financial feasibility of such a move: the country's foreign exchange reserves have fallen to $3.5 billion, and buying out the stake would require more money.

The tensions come amid the diamond market's worst slump in a decade, the publication writes. De Beers' revenue in 2023 is set to halve due to falling demand in CHINA and the US , as well as competition from synthetic diamonds. Anglo American-owned De Beers is up for sale, with its value having fallen to $4.9 billion in two years.

More than a dozen potential buyers, including former top executives of the company, are considering submitting bids for the purchase. 

Anglo American is in no rush to sell and is considering an IPO if it does not receive favorable offers. Analysts believe Boko's harsh statements could be a negotiating tactic.

In 2011, Botswana already refused to increase its stake in De Beers due to budget constraints, and now the situation is even more complicated. At the same time, the government is divided: some officials advocate an aggressive buyout, while others propose negotiating a price reduction .

In December 2024 , it became known that De Beers Group, the world's largest diamond producer, had accumulated record reserves of precious stones worth $2 billion - the largest amount since the 2008 financial crisis. The Financial Times, citing the company, reported that this was a consequence of a sharp drop in demand in the diamond market.

The decline in demand that began during the pandemiccovid-19 forced the company to cut production by about 20% and lower product prices.