The government of Botswana is unlikely to boost its shares in De Beers by 10 percent following the Oppenheimer family’s decision to sell their 40 percent stake to Anglo American for $5.1 billion.
Botswana had the right to take up its pro-rata share of the Oppenheimer stake, which would see it owning 25 percent of De Beers from the current 15 percent.
However, Miningmx quoted some industry analysts as saying that chances were slim for Botswana to take up the offer, which would cost it $1.26 billion.
“The Botswana government already has control of its stake in Debswana so it may not make sense to follow its rights,” RBC Capital Markets analyst Des Kilalea said.
Another analyst for Macquarie Research Kieran Daly was quoted as saying that although it was impossible to predict what the government of Botswana would do, there was little strategic rationale in Gaborone spending $1.26 billion to increase its stake in a business, which it effectively “controls”.
The government of Botswana co-owned Debswana with De Beers, giving it about 80 percent of the income generated by the company.
Just recently, Botswana managed to get rights to market 10 percent of Debswana’s annual production.
The Diamond Trading Company was also relocating its sorting and marketing offices to Botswana’s capital, Gaborone.
The country’s minerals minister Ponatshego Kedikilwe recently told Rough & Polished that Botswana was yet to decide on whether to boost its stake in De Beers or not.
“I would want to cross that bridge when I come to it because there are processes and approaches that have to be adopted before one can make a definitive statement…,” he said.
“…I am deliberately being cagey because am at a stage where I have to be careful…”
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
