Botswana Seeks to Double HB Antwerp Shareholding Amid Diamond Market Slump

Botswana plans to renegotiate its stake in HB Antwerp to double its shareholding at no extra cost due to a downturn in the diamond market. This strategy aims to leverage the current weaker valuation of the diamond industry, enhancing Botswana's presence in the downstream diamond market.

Botswana is moving to renegotiate its planned purchase of a stake in Belgian gem dealer HB Antwerp, aiming to double its shareholding without any additional cost. This decision comes in response to a downturn in the global diamond market, according to the country's mines minister, Lefoko Moagi, on Tuesday.

As the world's largest diamond producer by value, Botswana's economy has suffered from the declining demand for diamonds amid a global economic slowdown. Moagi informed parliament that the weaker diamond market had also reduced the company's valuation, providing an opportunity for the country to renegotiate its terms.

"We will not be injecting more capital, but we will get more shares for the same amount proposed in 2023," explained Moagi. "Instead of the 24%, we will negotiate to get 49.9% for the same amount initially proposed." Finance ministry documents from February indicated that 890 million pula ($65.95 million) were budgeted for the 24% stake, valuing HB Antwerp at roughly $275 million.

The HB Antwerp deal was initially unveiled during Botswana’s negotiations for a new sales contract with Anglo American's diamond unit De Beers in March 2023. Botswana aims to enhance its power to market its diamonds independently of the longstanding De Beers agreement, asserting that the HB Antwerp deal would bolster its influence in the downstream diamond industry.

The agreement includes supplying rough diamonds to the trader for five years through the state-owned Okavango Diamond Company (ODC). ($1 = 13.4953 pulas)