en.Wedoany.com Reported - Anglo American has selected a consortium led by former De Beers CEO Gareth Penny as the preferred bidder for its diamond business, a sign that the sale process for Anglo American's diamond operations is nearing completion.
Botswana's Minister of State and Defense, Moeti Mohwasa, confirmed to lawmakers on Friday that the Global Diamond Consortium, led by Penny, has been identified as Anglo American's preferred bidder. Anglo American declined to confirm the minister's remarks, stating only that the company continues to advance a competitive sale process involving multiple bidders and will announce updates at the appropriate time.
Independent diamond analyst Paul Zimnisky told MINING.COM that Penny is an ideal candidate because he understands that driving demand for natural diamonds is the top priority. Zimnisky noted that De Beers is unique in that it is both a mining company and must create demand for its products, a responsibility that is particularly heavy during difficult market conditions.
The sale is significant for Botswana. The country produces approximately 70% of De Beers' diamonds and holds a 15% stake in the company. As Anglo American restructures its portfolio, the Botswana government has repeatedly expressed interest in increasing its stake. The Global Diamond Consortium's proposal also includes participation from Angola and Namibia, both of which are interested in taking stakes in De Beers, and Botswana has welcomed this regional cooperation approach.
Penny led De Beers from 2006 to 2010 and has long been considered a top candidate to acquire the iconic diamond producer. Other bidders include a team led by Nir Livnat, Executive Chairman of the Diacore Group's diamond business, and Michael O'Keeffe, Non-Executive Chairman of Burgundy Diamond Mines.
Zimnisky believes that Botswana's pursuit of a larger stake, combined with potential participation from Angola and Namibia, could enhance the company's future prospects. He stated that the diamond industry currently needs a strong, unified advocate, and having a powerful business leader, savvy investors, and genuinely committed governments is a good combination.
The sale comes as De Beers faces its toughest market environment in decades. The company announced last week that it would suspend production at its largest diamond mine in South Africa due to weak demand and persistently low prices. Natural diamond prices are under pressure from slowing demand in China and increased competition from lab-grown diamonds, which are significantly cheaper to produce and purchase. The rough diamond price index from WWW International Diamond Consultants has fallen approximately 50% from its 2022 peak.
Despite the market downturn, Zimnisky said buyers may view De Beers as a long-term value investment. He noted that De Beers has a long and resilient history and, with sufficient capital and proper execution, the company can thrive again. From a supply perspective, with numerous independent diamond miners exiting and Russian sanctions in place, De Beers is currently in a very strong position.
