Gov’t to ‘raise hand’ for higher De Beers stake
Lewanika Timothy | Tuesday June 18, 2024 10:27
At the Future of Mining Summit this week, Minister of Minerals and Energy Lefoko Moagi said that the de-merger decision by Anglo has excited the government, which will tussle to protect its shareholding and up its stake in De Beers.
“It’s about time people in the diamond forte come in and play into the space, we are prepared and doing our work to ensure that when those shares are offered to us we are there as Botswana government to take them,” he said. “We will immediately raise our hand and we will seek partners with patient capital to invest,” Moagi said.
Recently quizzed on why government did not buy Khoemacau Mine amidst a global copper rush that has tailwinded copper prices in commodity markets, Moagi said that government opted out of the deal to avoid crowding out the private sector, as well as due to government technical inefficiency.
For the De Beers-Anglo demerger, however, Moagi said government will seek partners to aid the upping of its stake in the conglomerate.
De Beers’ parent company intends to sell the diamond miner as part of a strategy to unlock “significant” value in its businesses.
The move forms part of major structural changes that will simplify the Anglo-American portfolio and deliver growth according to its management. Plans will see De Beers being “divested or demerged, to improve strategic flexibility for both De Beers and Anglo American” the company clarified in a statement early this year.
Anglo is exploring a range of options to separate from the De Beers business, having made significant progress toward finalising the sales agreement with the Botswana government, it added. The restructuring will allow the company to focus primarily on its copper, premium iron ore, and crop nutrient assets, it noted.
In February, Anglo said it was reviewing its global assets after its 2023 profits fell 94%, with a $1.6 billion impairment charge on De Beers due to the double-digit fall in retail diamond prices and demand suffering last year.
That process was significantly put under pressure by a multi-US billion dollar buyout bid by BHP, the world's biggest miner. The Australian super-miner specified that its value proposition for Anglo included reduced South African exposure and a review of De Beers’ position in Anglo.