It is in Botswana’s best interest to focus more on diversifying the economy rather than doubling down on diamonds, according to Paul Zimnisky, an independent diamond and jewellery analyst based in New York.
Botswana has indicated willingness to increase its stake in De Beers from 15% to a majority position.
He told Rough & Polished’s Mathew Nyaungwa in an exclusive interview that public-private partnerships tend to work best when the government does not have the controlling share and instead leans on a strong private partner.
Zimnisky said Botswana had an opportunity to increase its stake in De Beers in 2011, amidst the Oppenheimer sale, but it would have been too disruptive to the nation's balance sheet.
He said Botswana's economy is in a perilous state following a multi-year lull in the diamond industry, which makes it difficult for the country to acquire full control of De Beers.
Meanwhile, Zimnisky said the natural diamond industry could still have a bright future ahead if everyone plays their cards right.
He said the focus should be on coming up with ways to sell fewer diamonds at higher prices by creating more desire for natural diamonds through successful marketing and storytelling.
Zimnisky warned that it would be a “suicide mission” for natural diamonds to compete with lab diamonds on price.
He also said the natural diamond industry performs best when patience is practised with longer-term investment and longer-term strategy planning.
NB: Zimnisky will be giving keynote presentations at the DMCC Lab Grown Diamond Symposium in Dubai, UAE, on September 30, 2025 and the Prospectors & Developers Association of Canada (PDAC) in Toronto, Canada, on March 2, 2026. Additional information can be found on his website.
Below are excerpts from the interview.
How might Botswana's demand for a controlling stake influence potential buyers or lead to an alternative like an IPO?
As far as a De Beers sale goes, there are just so many moving parts right now. It's been a difficult stretch for the larger industry, so, understandably, emotions are high. But at the end of the day, all stakeholders seem to be aligned in that they seek a well-capitalised, stable partner that is focused on longer-term value and legacy creation for natural diamonds.
How feasible is it for Botswana to increase its stake in De Beers from 15% to a majority position, given the requirement to pay market value without discounts?
In 2011, Botswana had an opportunity to increase its stake in De Beers amidst the Oppenheimer sale, but at the time, the country felt it would have been too disruptive to the nation's balance sheet. Today brings a similar situation in that there is an opportunity to expand its stake, but the Botswana economy is in a somewhat precarious state following a multi-year lull in the diamond industry.
What financing options might the government of Botswana explore to fund such an acquisition?
There are organisations like the IMF, OECD and World Bank that can offer assistance to governments in situations like this. It is difficult to say what will happen. Everything is on the table.
What economic risks does Botswana face if it proceeds with acquiring full control of De Beers during a period of crashing diamond prices, and could this lead to further devaluation of the Pula or budget shortfalls, as some analysts have warned about 'catching a falling knife'?
I think it would be in Botswana's best interest to focus more on diversifying the economy rather than doubling down on diamonds. I do think the diamond industry could still have a bright future ahead if everyone plays their cards right, but it's risky to be all-in on one industry. Secondly, when it comes to running a business, I think public-private partnerships tend to work best when the government does not have the controlling share and instead leans on a strong private partner.
President Duma Boko has publicly agitated over De Beers' handling of diamond sales, citing a stockpile of around 10 million carats and threatening 'unusual decisions' if sales don't improve—what underlying factors, such as inventory management or market demand, do you believe are driving this tension, and how does it tie into the February 2025 sales agreement?
There is talk of dumping high volumes of diamonds into the market to raise revenue, but this would be at the long-term detriment to the industry, in my opinion. I think the focus should be on coming up with ways to sell fewer diamonds at higher prices via creating more desire for natural diamonds with successful marketing and storytelling. This is also the best way for natural diamonds to compete with lab-grown diamonds. Natural diamonds cannot compete with lab diamonds on price, so don't try –I think this would be a suicide mission.
This industry performs best when patience is practised with longer-term investment and longer-term strategy planning. There will always be peaks and troughs, and panicking during a trough could not only prolong the lull but also damage the longer-term viability of the industry.
To what extent has the rise of lab-grown diamonds contributed to the current sales slump and De Beers' reported $189 million loss in the first half of 2025, and what strategies could Botswana or De Beers adopt to differentiate natural diamonds in a market where synthetics are up to 80% cheaper?
I see LGDs as a supply-side factor for natural diamonds. There's more competition, especially with lower price point goods. But LGD are just one of multiple factors that have led to the industry lull over the last few years. For instance, a recovery in Chinese demand could have a profound impact on the natural diamond industry fundamentals if we see that. Long-term, it is my belief that natural diamonds can survive and even thrive along with LGD if the industry executes on differentiation and desirability initiatives. For instance, the industry has technology to show that natural diamonds can be differentiated from LGD in seconds in front of a consumer, so use it.
Botswana supplies about 70% of De Beers' rough diamonds through the Debswana joint venture—how might the government's push for more control over marketing and sales affect the long-term viability of this partnership, especially with mining licenses extended to 2054 under the recent agreement?
Botswana has secured the right to sell 30% of the joint ventures’ production, with the share increasing to 50% in the coming years. So, Botswana certainly has an opportunity to do things its way.
I think it is very important to publicly show a unified front when it comes to the current Botswana-De Beers partnership. This instils confidence in the industry and is more likely to attract stronger suitors for the industry while De Beers is up for sale. Publicising infighting has the opposite effect. The industry is at a fragile moment and needs to show unified strength, not division. With a prosperous diamond industry, everyone wins –and in times like this, focus, discipline and patience are required, which should emanate from partnership strength and synergy.
How has Botswana's government expressed dissatisfaction with Anglo American's handling of the De Beers sale process, such as claims of being sidelined, and what leverage does Botswana hold—through its 50% ownership in Debswana or regulatory approvals—to shape the outcome?
Botswana owns a 50% share of its joint venture with De Beers as well as a 15% share of the larger De Beers entity. So, Botswana is an integral part of this. It would be in a buyer's best interest to have a cordial relationship with Botswana.
Given that the Diamonds for Development Fund launched in February 2025 with an initial BWP 1 billion investment, how could increased Botswana control over De Beers support economic diversification away from diamonds, such as through local beneficiation and vocational training?
I see that as a seed for a sovereign wealth fund of sorts. I think this initiative is something that all stakeholders can be proud of. Botswana has a history of successfully allocating diamond profits to infrastructure, schools and hospitals. Hopefully, this fund will accelerate those initiatives and further promote entrepreneurship and innovation, which is the key to healthy economic growth.
If diamond sales remain stagnant into late 2025, what 'drastic' actions might President Boko take—such as nationalising sales or renegotiating the joint venture—and what precedents from Botswana's past negotiations with De Beers could inform the results?
If Botswana were to nationalise its diamond mines, I think it would be an utter disaster for all parties. Hopefully, this is something that is not even on the table.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
