Mission Masisi at JCK Las Vegas: Safeguarding the Future of Botswana

In a surprising move, Botswana President Masisi yesterday left the country to join industry stakeholders at the 2024 JCK Las Vegas show. Botswana finds itself in the middle of a perfect storm of challenges: De Beers' parent company Anglo American recently became the target of potential take-over bids, which led to Anglo announcing plans to spin off its diamond business. As the government of Botswana holds 15% of the shares of De Beers, and 50% of its Botswana-based diamond mining operations through Debswana, uncertainty about the future of De Beers is adding pressure on the still-to-be fully signed renewal of the 10-year agreement between government and De Beers and the upcoming US$6bn expansion of the Jwaneng mine, crown jewel of the De Beers portfolio. Addressing local press before departing to the USA, Masisi told reporters that he is cautious about being sold – as part of the Anglo group - “to a hostile owner”, referring to BHP’s clear disinterest in Anglo’s diamond branch. BHP meanwhile has walked away from making another takeover bid. Masisi indicated he is seeking reassurances that De Beers will be separated from Anglo before the parent company gets sold, if that should happen.

And Botswana has other worries on its mind. In addition to the fact the natural diamond industry has been faced with months of double-digit declines in rough and polished prices, the increasing market share of Lab-grown diamonds (LGD) on consumer levels, especially in the US, fuels fears that a continued trend will severely impact state budgets, as Botswana relies heavily on revenues from its natural resource. “If LGD take our space, then you and I are finished”, the President commented.

Lastly, G7 sanctions on Russian diamonds have been a topic of much discussion in recent months. Just last week, Antwerp umbrella organization AWDC send out a statement calling for the possibility of adding one or more G7 verification points, referring to Botswana as a key producing country in this context. Undoubtedly Masisi will use his time at JCK to speak with key stakeholders from government and industry to explore the options to establishing such a verification point in Botswana.

Photo credit: Anglo American - Botswana