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Botswana vows to protect its diamond interests

Publish date: 13 May 2024
Issue Number: 1076
Diary: IBA Legalbrief Africa
Category: M&As

Botswana President Mokgweetsi Masisi has vowed to protect the country’s interests, including its 15% stake in giant De Beers, should BHP Group acquire Anglo American. Anglo, which rejected a BHP proposal valuing the mining company at about $39bn, owns the other 85% of De Beers. In terms of the proposed deal, BHP – once a major diamond producer itself – said that De Beers would be put on a strategic review. Anglo, the only major miner with a big diamond business, has already been reviewing the future of units, including De Beers. Moneyweb reports that Botswana has not been formally approached by either BHP or Anglo, Masisi said in a television interview on Wednesday in the US. ‘No way would we allow ourselves to willingly be made redundant or irrelevant,’ the President said. ‘So Botswana will respond in ways that are protective of its interests.’ Botswana’s concerns potentially add to the swathe of challenges that BHP CEO Mike Henry faces in pulling off an ambitious but complex deal. Moneyweb notes that antitrust authorities from China, Japan and SA are likely to scrutinise an acquisition that would create the world’s biggest copper producer.

Moneyweb notes that the diamond industry is gradually recovering after the sector almost came to a complete standstill in the second half of last year as De Beers and Russia’s Alrosa PJSC – the two biggest miners – all but stopped supplies in a desperate attempt to stem a slump in prices. That hit earnings at De Beers, which mines more than three-quarters of its diamonds in Botswana. ‘The value of De Beers is fundamentally created by Botswana,’ Masisi said. ‘That can never be missed by anybody.’ Botswana is the world’s largest producer of rough diamonds by value.

Full Moneyweb report

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