Botswana’s Masisi vows to protect interests in De Beers amid BHP’s Anglo bid

Botswana’s President Mokgweetsi Masisi has articulated a firm stance on the country’s involvement and interest in De Beers, a diamond division caught in the middle of a R700bn potential tie-up between its parent, Anglo American, and larger rival Australia’s BHP.

“We remain laser-focused on the developments because we are clearly an interested party. No way would we allow ourselves to willingly be made redundant or irrelevant and so Botswana will respond in ways that are protective of its interests and through a process that we know best,” Masisi told CNBC Africa on Thursday. 

His comments can be seen as another curveball for BHP, which has made a $39bn (more than R720bn) overture to buy Anglo on condition that the target offloads its SA assets: Anglo American Platinum and Kumba Iron Ore. The BHP proposal, which is not yet binding, makes no mention of De Beers, the outlook of which is bleak as an increasing number of environmentally conscious consumers shift to laboratory-grown diamonds. 

BHP’s determination to add more copper to its portfolio of minerals that are guaranteed a role in the eco-friendly world could be put to the test by SA, the history and fortunes of which are intertwined with that of Anglo.  Energy & mining minister Gwede Mantashe has already voiced his opposition to what would be the biggest mining merger & acquisition (M&A) deal in a generation. 

“I want to state for the record that the value of De Beers is fundamentally created by Botswana and that can never be missed by anyone,”  Masisi said, underscoring the link between Botswana’s natural wealth and the success of De Beers. 

BHP has until next week to make a firm offer for Anglo, the board of which has rejected the approach as opportunistic and undervaluing the company’s prospects.

Weak demand for diamonds in the key markets of the US and China caused Anglo in February write down $1.6bn in De Beers’ value. The Wall Street Journal reported two weeks ago that Anglo was considering selling De Beers and that it has had discussions with potential buyers. According to the paper, the rumoured sale was a separate process from BHP’s takeover bid of Anglo.

Anglo has in recent years moved most of De Beers’ functions to Botswana. The group last month relocated the De Beers Group Auctions business headquarters from Singapore to Botswana.

Emma Peloetletse, permanent secretary to Masisi, said at the time that the relocation of De Beers’ Auctions underscored Botswana’s “growing role as a global hub for the diamond industry and will further enhance our economy and bolster skills development in the sector”.

motsoenengt@businesslive.co.za