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In a significant development, Botswana is considering increasing its stake in De Beers while Anglo American explores a potential spin-off. This move could reshape the diamond industry and strengthen Botswana's influence in the market. Read the full article for an in-depth analysis of the potential impact and what it means for the future of diamond mining: https://lnkd.in/dHC36aAU #DeBeers #DiamondIndustry #Botswana #AngloAmerican #MiningNews #BotswanaMiningReview

The 2015 decline was, as De Beers’ then-CEO Philippe Mellier said at the time, an inventory problem and not purely a demand problem. The industry was suffering from structural overstock challenges.  The 2023 crisis was due to an unprecedented threat from synthetics, combined with geopolitical uncertainty, difficult economic conditions in the US, and a demand crash in China that looks pretty deep-seated.  In December 2015, Anglo American’s leaders informed investors of a restructuring: The mining giant would be cutting 85,000 jobs, selling some of its noncore assets, and streamlining the business into three divisions, one of which was De Beers. This put a temporary stop to speculation that Anglo could sell its famed subsidiary at the end of a challenging year for commodities, including for diamonds. https://lnkd.in/dZjbEGkj

Big news in the diamond industry: Anglo American has confirmed its intention to seek a buyer for De Beers #diamondnews #naturaldiamonds #debeers #angloamerican #diamondindustry #diamondmarket #diamonds #diamondmining

BOTSWANA, DE BEERS and the JV's FUTURE. An end of @AngloAmerican legacy and possible end to the company’s relationship with @BWGovernment due to BHP’s sale of @debeersgroup looms. Apparently in merging with Anglo, @BHP goal is to grow copper assets. So, what is at stake? First things first. 1. No diamond mines are as profitable as @CompanyDebswana 2. As mining/diamond jewelry brands go, none match De Beers in marketing, upstream and midstream technology. 3. Demand for gem diamonds far exceeds demand. So, in the absence of any discoveries in the horizon, De Beers thanks to Botswana assets is a lucrative acquisition with a steady supply and revenue for decades. A look at some essential regulatory and strategic questions. a). On what condition should Botswana approval Anglo share transfer to BHP and BHP to a 3rd party? Getting in the way could send a bad signal to prospective partners and lead to a race to the bottom. But there must be an outright price paid to Botswana based on NPV that will guarantee a new owner revenue and market share through De Beers and Debswana. b). Who might be interest in acquiring Anglo shares? Many starting with mining houses wanting to diversify/grow their portfolios, diamond jewelry retail houses looking for security of💎supply through backward integration, the Gulf States (notably Emiratis) wanting to go straight to the top of the hierarchy of diamond mining and sadly an occasional chancer. c). What is an ideal partner for Botswana? Four possible considerations- 1). Strong value proposition to Botswana based on ability to help Botswana leapfrog economic goals, 2). strategic alignment and capacity to maximize the value a blue-chip asset) 3. empathy for the peculiarities of conducting business in and with developing nations and 4). a track record of implementation of ESG rules as relates to luxury commodities. d). Opportunities To Botswana? An increase of shares in De Beers. Rather than a cash payout, @BWGovernment should consider a share swap such that it reduces it shares in @CompanyDebswana in exchange for a larger share in @debeersgroup. De Beers dividends should make up for the Debswana revenue stream. Importantly, Botswana diamonds will run out and so, a larger share in De Beers is more forward looking. Botswana could address risk of concentration upstream by finding a partner with a big footprint in cutting, polishing and retail. Having struggled with over dependency on mining, a partner with other investments like petroleum and a share swap in Debswana could bridge the gap. e). What could a governance mechanism for a strategy design and execution strategy be? A non-partisan and inclusive parliamentary committee approach, guided by a world class M &A risk, legal and financial advisory firm might be a good start. @BWParliament @BloombergAfrica @ICMM @NYT @MiningWeekly @Mines_RSA https://lnkd.in/dVdJFhAa

De Beers' value is derived from the diamond market, but its future is uncertain due to a failed acquisition bid by BHP Billiton and poor performance in 2023. Anglo American confirmed plans to divest or demerge De Beers to enhance strategic flexibility after rejecting BHP's offer. BHP's interest in Anglo was mainly focused on copper assets, not diamonds, leading to speculation about De Beers' future. De Beers' revenue and earnings have been declining, prompting Anglo to consider offloading the diamond giant. De Beers holds significant influence in the diamond market despite its weak financial performance, with a complex ownership structure and various operations. The diamond industry has undergone significant changes in the past decade, impacting De Beers' role and market control. De Beers continues to influence the industry through rough sales, pricing, and marketing initiatives, despite facing challenges in consistent growth. Botswana plays a crucial role in De Beers' operations and supply chain, with the potential to shape the diamond industry's narrative. Anglo American's management of De Beers involves significant investments and partnerships with Botswana, highlighting the company's commitment to economic upliftment. A potential buyout of De Beers would mark a new era for the diamond industry, potentially empowering Botswana and creating value for the market. #debeers #diamondindustry

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This is how the continent should question "global" deals involving its own mineral resources. Thank you Sheila Khama for this analysis! I like the idea of a share swap or part share-swap. It could be intra-African: imagine a deal with another diamond producing country like Angola and a share swap with Sonangol! Or imagine share swop across other minerals e.g. a global buyer with an existing portfolio of critical minerals so that Botswana can gain long term benefits from a global critical mineral value chain and become a more direct player in the global energy transition?

https://lnkd.in/gEdsnezn This makes sense. Vertical integration may be a viable business model for some industries. I appreciate that there are no absolutes but we can get an idea on how difficult it is even for De beers to run their retail businesses profitably so for a luxury retailer to own a mining business it is almost suicidal. The skill sets are totally different. There is a sea change going on in the diamond mining business and no one seems to have the courage to ask the tough question : why mine for diamonds when you can manufacture it better at lower cost using technology ? For sure the negative impact of this is huge for the mined diamond producing countries but can we look at the numbers first ? Grant Mobley disagrees which is fine. De beers have access to the economics of both categories so why not share the numbers ?

Things That Make You Go Hmm🤔: Does Anyone Want to Buy De Beers? For sale: Diamond miner with unprecedented political challenges operating in the toughest market for years. In December 2015, Anglo American’s leaders informed investors of a restructuring: The mining giant would be cutting 85,000 jobs, selling some of its noncore assets, and streamlining the business into three divisions, one of which was De Beers. This put a temporary stop to speculation that Anglo could sell its famed subsidiary at the end of a challenging year for commodities, including for diamonds. The rumors have returned. In February of this year, Anglo CEO Duncan Wanblad responded to speculation of a possible divestment by saying it was “not specifically” something the parent company was considering, according to the Financial Times. However, last week, The Wall Street Journal reported that Anglo was in the early stages of discussions about a potential sale. This came days after BHP’s $39 billion offer to buy Anglo, which Anglo rejected. This time around, Anglo appears to be putting more serious efforts into a De Beers deal. The mining conglomerate has held conversations with potential buyers for the diamond unit in recent weeks, “including luxury houses and Gulf sovereign-wealth funds,” The Wall Street Journal said, citing unnamed sources. The situation touches on key questions many in the industry have had in the past year: Was the 2023 slump in the diamond market another cyclical downturn or the sign of a more somber future for the industry? Have lab-grown diamonds had a permanent impact on natural? "Gulf sovereign-wealth funds"? It is amazing how Anglo and De Beers are being passed around instead of jingoistically at least, being "bought" by South Africans. By the way, I am not for any moment suggesting the nationalization of Anglos, for we know how that ends up in Africa. Imagine if some homegrown magnate, a "Robert Gumede" of mining in South Africa (and no not "Patrice Motsepe" again please he is spoilt for opportunities that man as if he is the only black entrepreneur in SA🙄) could have the wherewithal to "buy back Anglo"🤔. Not, "for the culture" as they say, nor for the "Pirates, de 5 Skippas" but to sure how we have become truly empowered. Sigh...no such luck. Sondela ke bo Gulf funds sikhulume mayelano nendodakazi yethu Anglo🤷♂️, we have recieved your letter from the uncles🤣! Hmm... #mergersandacquisitions

Navigating your strategy in the face of complexity This is a remarkable analysis by Sheila Khama. She has broken down the impact of a potentially complex situation, and considered multiple scenarios that could strategically place Botswana in the opportunity sweet spot as well as the emerging risks at play. This potential transaction may be an awakening to a new era for Botswana, and the realization that the market landscape is rapidly ever evolving and revolving. We from the outside thought the hurdle has been crossed in the last year, with the new Debeers and Botswana Government agreement. And here we are, once again thrown into more uncertainty and more ambiguity. I particularly found the share swap concept fascinating as a strategy to maintain control and governance. With the imminent dilution, the prize here is the long-term strategic horizon achieved through vertical integration. All in all, a strategy that is adaptive to complexity can never be static, and requires balance between long term growth and short term performance, change and stability, and control and value creation.