Botswana Aims to Double Stake in HB Antwerp Without Extra Cost
The Government of Botswana is aiming to renegotiate its planned acquisition of a stake in Belgian diamond dealer HB Antwerp, seeking to double its shareholding to 49.9% without additional financial investment.
This move comes in response to the recent downturn in the global diamond market, which has adversely affected the valuation of diamond-related companies.
Botswana, the world’s largest diamond producer by value, has been significantly impacted by the global economic slowdown that has led to a decline in demand for diamonds. The country’s Mines Minister, Lefoko Moagi, informed parliament on Tuesday that the weakened diamond market has presented an opportunity to renegotiate the terms of the deal.
“We will not be injecting more capital, but we will get more shares for the same amount proposed in 2023,” Moagi stated. Initially, Botswana planned to acquire a 24% stake in HB Antwerp, but the government now seeks to increase its stake to 49.9% at no extra cost.
In February, Botswana’s Finance Ministry budgeted 890 million pula (approximately $65.95 million) for the 24% stake, which valued the Belgian company at about $275 million.
The HB Antwerp deal was first announced in March 2023, during Botswana’s negotiations for a new sales contract with De Beers, the diamond unit of Anglo American.
The deal is a strategic move by Botswana to enhance its control over the marketing of its diamonds, reducing its reliance on the long-standing agreement with De Beers.
The partnership with HB Antwerp is also intended to bolster Botswana’s presence in the downstream diamond industry, with the state-owned Okavango Diamond Company (ODC) supplying rough diamonds to the trader for five years.
As Botswana continues to navigate the challenges posed by the global economic environment, the government remains focused on securing better terms for its diamond resources to sustain the country’s economic stability and growth.
Source: CNBC AFRICA
