Namibia considers N$3bn De Beers stake as experts warn ‘you don’t buy a dead horse’

The government is considering spending up to N$3 billion to buy a stake in diamond giant De Beers, a decision experts say could place additional pressure on the country’s public finances. Namibia is reportedly considering partnering with Angola and Botswana, which already hold a 15% stake in the De Beers Group, the world’s largest diamond company. Speaking to The Namibian this week, minister of information and communication technology and government spokesperson Emma Theofelus said the deal has not been finalised yet. “Kindly take note that the matter you are referring to is still under discussion at Cabinet level and thus not finalised. Therefore, it would be premature for me as government spokesperson to give you any information around a matter still under consideration by the Cabinet,” she said. The negotiations come after mining conglomerate Anglo American put its 85% stake in the company up for sale following its announcement in May 2024 that it would exit De Beers as part of a broader restructuring aimed at focusing on copper and iron ore. The Namibian in February reported that Anglo American had announced a move to reduce its internal valuation of De Beers to N$6.9 billion, down from its former high of N$65.7 billion. This slump in the value of De Beers has opened the door to new ownership possibilities in the miner. The planned acquisition would give Namibia indirect ownership of diamond assets in Botswana, Angola, and South Africa, while potentially securing the country a greater role in shaping the future of the global diamond trade. Botswana and Angola have also express interest in buying into De Beers. However, sources close to the matter say the decision is a bad investment and a waste of public funds. Experts have questioned how the government would source the funds required for the investment and the risks associated with buying into a company whose value has declined. Institute for Public Policy Research executive director Graham Hopwood cautions the government against the uncertainties facing the global diamond industry. “It would be wise to commission and publish an independent feasibility assessment that examines the commercial, strategic and fiscal implications of the government acquiring a stake in De Beers,” he says. Namibia is already deeply integrated into the De Beers system through Namdeb Holdings, of which it owns 50%. Namdeb and Debmarine mine diamonds, while the Namibia Diamond Trading Company sorts, values and distributes them for sale and local processing. Economist Omu Kakujaha-Matundu says the government’s decision needs to be reconsidered due to the decline in De Beer’s value. “My take on this will be ‘you don’t buy a dead horse’. The diamond industry is a declining industry, owing to the competition from synthetic diamonds. “I would implore the government to reconsider buying equity in De Beers,” he says. The post Namibia considers N$3bn De Beers stake as experts warn ‘you don’t buy a dead horse’ appeared first on The Namibian .