To De Beers or not to De Beers? That is the question
Mphoeng Mphoeng | Thursday October 2, 2025 10:41
Naturally, the section that has attracted the most attention—both in the media and among attendees—was my discussion on diamonds. In particular, I highlighted not only the fiscal pressures Botswana is currently facing due to weak diamond sales, but also the wider impact this has on our foreign reserves, our ability to pay suppliers, and even our currency.
One of the central questions I posed was whether it is the right time for Botswana to consider purchasing De Beers, given the current circumstances. Over the past few weeks, some of my remarks have been presented in the media under headlines that, while capturing certain elements, have not fully reflected the nuance or overall tone of my message. I therefore wish to clarify my thoughts more fully here.
First, it is important to acknowledge that discussions about the potential sale of De Beers remain largely confidential, and as an observer outside the negotiation room, I do not have access to all the details. This is critical, because any conclusions reached without full information must remain tentative. The government, with access to more complete facts, is in a far stronger position to weigh the risks and opportunities. With that said, I would like to share a few reflections which I trust are already being considered and mitigated by the leadership.
The first and most obvious concern is the fact that Anglo American—one of the largest and most experienced mining companies in the world—has chosen to sell its stake. When a company with such deep knowledge of an asset decides to exit, it naturally raises questions. While this does not necessarily invalidate the opportunity, it is a signal that must be taken seriously.
Secondly, this development runs counter to Botswana’s long-standing goal of diversifying away from diamonds. For over 30 years, we have spoken about reducing reliance on this single commodity. By pursuing this deal, we may in fact be doubling down on diamonds rather than transitioning away from them.
If the investment ultimately requires around $5 billion—equivalent to roughly P70–P80 billion—it is worth considering whether that capital might generate greater long-term benefits if directed toward diversification, especially in critical minerals. Botswana has the resources, strategies, and positioning—through initiatives such as special economic zones and logistics frameworks—to develop industries linked to the clean energy transition. Investments in solar panels, electric vehicle batteries, and related sectors could create broader economic activity and employment, while also aligning us with global demand trends expected to grow strongly over the next 20–30 years.
By contrast, it is less certain that diamonds can deliver comparable returns over such a horizon. Structural changes in the diamond market, including the rise of lab-grown diamonds, suggest future revenues may not reach historic highs. Whereas diamonds once generated P30–P40 billion annually, it is more realistic to expect that figure could fall to a third of those levels. Reports coming out of the biggest markets for diamonds being the US and Canada show that in the last 7-8 years, demand for lab grown diamonds has grown exponentially with the middle class not caring as much what they buy. In fact, lab grown diamonds are positioning themselves as being less damaging to the environment and having less issues socially (e.g. other countries still using child labor and conflict diamonds).
These challenges around positioning and branding have therefore put our government onto wanting to take a larger role in marketing our diamonds and selling our ESG friendly story. This is a great move to counter the narrative and to hone in on the Botswana story. The question though will always be whether this will be enough to change the trajectory of the industry (or at least specifically our diamonds). That said, price remains the key factor. If Botswana can acquire De Beers at a valuation that accurately reflects a smaller and riskier market, then the deal could still represent a sound strategic move—especially as ownership would allow us to exercise greater control over our economic destiny in this sector.
I do trust that the leadership are factoring all of these issues in and will come to the correct conclusions; conclusions driven by cold hard facts and numbers and not by nostalgia. Fifteen years ago with Botswana at all when the Oppenheimers sold to Anglo and when Botswana was at its fiscal might, this may have been a better time. The current situation where Botswana feels at its weakest fiscally, with other competing priorities, it feels like Botswana should be looking to the future (critical metals) rather than the past.
In conclusion, Botswana faces a strategic choice. Owning De Beers may bring long-term advantages, but only if the price reflects the realities of today’s diamond market. At the same time, there is a compelling case to allocate significant resources toward diversification into critical minerals, which represent the industries of the future. While I do not have access to all the information available to government decision-makers, my perspective is that Botswana should pursue a careful balance: securing diamonds at the right price if we proceed, while also ensuring that we invest meaningfully in areas that promise sustainable growth over the next 20–30 years.
*Mphoeng Mphoeng is a Director at a corporate finance, economics and investment consultancy MP Consultants. He has previously worked at University of Botswana, BIFM, Standard Chartered and Bank of Botswana