Botswana turns to UAE, Oman in De Beers power play
Botswana is negotiating with sovereign wealth funds from the United Arab Emirates and Oman to potentially acquire a larger stake in De Beers, as Anglo American proceeds with plans to sell its 85% holding in the diamond giant. The move comes after Botswana rejected Anglo’s initial $5 billion valuation for the De Beers stake, seeking to secure greater control over its diamond revenue stream without being outbid by international rivals. This power play could reshape the global diamond industry, as Botswana currently holds a 15% stake and its Debswana joint venture with De Beers produces nearly all of the country's diamonds, which account for over 80% of its export earnings.
## Botswana turns to UAE, Oman in De Beers power play: A new axis in diamond diplomacy
The global diamond industry is facing a tectonic shift as Botswana, the world’s largest diamond producer by value, embarks on an aggressive strategy to secure greater control over De Beers. The landlocked southern African nation, historically reliant on the mining giant for its economic lifeline, is now turning to sovereign wealth funds from the United Arab Emirates (UAE) and Oman to counter Anglo American’s planned sale of its 85% stake in the diamond behemoth. This move, which analysts describe as a high-stakes 'power play,' could fundamentally alter the ownership structure of a company that has controlled the global diamond trade for over a century.
### The Core Conflict: Valuation and Control
At the heart of the dispute is Anglo American’s decision to divest its majority stake in De Beers as part of a wider corporate restructuring following a failed takeover bid by BHP. Anglo American has reportedly placed a $5 billion valuation on its De Beers stake—a figure that Botswana’s government, which already holds 15%, deems too high given De Beers' declining revenue and the structural shift towards lab-grown diamonds. Botswana’s President Mokgweetsi Masisi has publicly stated that the country intends to 'take a controlling position' in De Beers, but lacks the immediate capital to match Anglo’s asking price. By courting Gulf partners, Botswana aims to form a consortium that can negotiate a lower price while retaining a majority stake for itself.
### The Strategic Pivot to the Gulf
Botswana’s outreach to the UAE and Oman is not merely financial but geopolitical. The UAE, particularly through its investment arm Mubadala, has been aggressively diversifying its resource portfolio beyond oil, including critical minerals and diamonds. Oman, meanwhile, is positioning itself as a logistics and diamond trading hub. If successful, this coalition would create an alternative pipeline for rough diamonds from Botswana, potentially bypassing traditional trading centers like Antwerp and Mumbai. The Debswana joint venture—the 50/50 partnership between De Beers and Botswana—produces approximately 20 million carats annually, representing a fifth of global rough diamond supply. Any change in ownership could impact supply agreements, pricing mechanisms, and beneficiation policies.
### Industry Ramifications and Risks
This development comes at a delicate moment for the diamond sector. Global diamond demand has softened post-pandemic, with sales of natural diamonds pressured by cheaper, eco-conscious lab-grown alternatives. De Beers itself reported a 15% drop in rough diamond sales in the first half of 2023 compared to the previous year. For Botswana, which derives over 80% of its export earnings from diamonds, losing control of De Beers to a non-African entity could undermine its long-term mineral wealth strategy. However, partnering with Gulf states also carries risks, including potential tension with Western diamond traders and the possibility of sanctions or export restrictions on conflict-free diamonds.
### Critical Minerals Context
While diamonds are not classified as 'critical minerals' in the same vein as copper or lithium, they are increasingly viewed as a strategic resource for high-tech and defense applications. This classification has led to renewed interest from sovereign funds seeking to secure long-term supply chains. Botswana is also a significant producer of copper and nickel, making the De Beers stake a gateway asset for broader African mineral engagement. If the Gulf-Botswana alliance materializes, it could set a precedent for other resource-rich African nations looking to renegotiate colonial-era mining contracts.
### Outlook
With Anglo American expected to complete its sale process by mid-2025, Botswana is racing to finalize its consortium terms. The outcome will not only determine De Beers’ future but also signal whether emerging economies can secure control over their resource value chains in an era of intensified global competition. For now, all eyes are on the diamond corridor between Gaborone, Abu Dhabi, and Muscat.