Anglo American may continue to control De Beers for up to 18 months after agreeing a sale, as the transaction could require regulatory clearance in the US, China and Europe, according to Anglo American chief executive Duncan Wanblad. Botswana, which owns 15% of De Beers, also holds pre-emption rights that could affect the timetable.
Anglo is seeking to sell its 85% stake in the diamond producer as part of a restructuring announced in May 2024. The mining group is also working towards a merger with Canada’s Teck Resources to form Anglo Teck.
Buyer Identity Will Determine Approvals
Wanblad said the necessary regulatory filings cannot be established until the prospective buyer or consortium has been confirmed.
“We won’t know exactly which jurisdictions we need to file in until we’ve got the final group of consortium buyers confirmed,” he said.
“De Beers currently trades in the US, China, Europe, so we should expect it’ll require approval there too, just given market concentrations and so on. I don’t know for sure whether it’s a year, maybe it’s a year to 18 months. I think that just depends on who the final buyer is going to be.”
The timetable means De Beers could remain under Anglo’s control after a sale agreement has been signed and potentially after the completion of the Anglo Teck merger. Anglo is aiming to reach an agreement on De Beers by the end of 2026.
Botswana Retains Pre-Emption Rights
Botswana’s government owns the remaining 15% of De Beers and has previously expressed interest in increasing its stake. Its pre-emption rights allow it to respond to the terms offered by another buyer.
Anglo is consulting the government during the two-stage sale process, which could help clarify Botswana’s position before the transaction enters its final approval phase.
Reports have identified the Global Diamond Consortium, led by former De Beers managing director Gareth Penny and involving diamond-producing countries and members of the trade, as a possible buyer. No purchaser or transaction value has been confirmed.
De Beers to Remain in Anglo’s Accounts
After a sale agreement is reached, De Beers is expected to continue appearing in Anglo’s financial results as a discontinued operation until the required approvals are secured.
The prospective owner would be consulted on decisions affecting the business during this period, but Anglo would retain formal control. Wanblad said: “The decisions we’re making, they are our decisions.”
He added: “We have to deal with whatever the market throws at us.”
Anglo could therefore remain responsible for operational, commercial and financial decisions at De Beers while progressing its merger with Teck.
Diamond Market Conditions Affect Sale
The divestment is taking place amid weaker rough diamond demand and pricing, which have affected De Beers’ earnings and could influence its valuation and the terms offered by prospective investors.
Anglo has valued its De Beers stake at about $2.3 billion, while reports have suggested that an offer could be closer to $1 billion. Neither Anglo nor De Beers has confirmed an agreed valuation.
De Beers has also taken steps to reduce expenditure. The planned two-year suspension of production at the Venetia mine in South Africa is expected to save approximately $300 million, although prospective buyers are also likely to consider the implications of the closure for production.
Any purchaser will also need to determine its level of investment in category marketing as the natural diamond sector seeks to support consumer demand and differentiate its products from laboratory-grown diamonds.
Implications for the Jewellery Trade
For jewellers and diamond suppliers, the extended approval period means a change in ownership may not lead to immediate changes in De Beers’ commercial operations. Anglo’s continuing control could maintain the existing decision-making structure while regulatory reviews are completed.
The identity and plans of the eventual buyer could affect De Beers’ production strategy, rough diamond sales arrangements and marketing expenditure. Sightholders and other rough buyers will therefore be watching the process for any changes that could influence supply or trading conditions.
As De Beers remains a significant supplier of rough diamonds, decisions on production volumes and sales policy could have consequences across the supply chain, including for manufacturers, wholesalers and retail jewellers.
