Diamonds / Industry

Botswana Buys 24% of Antwerp Diamond Company HB


The government of Botswana has taken a 24% equity stake in diamond company HB Antwerp, in a move that some say raises new questions about Botswana’s longstanding relationship with De Beers.

The move came as HB Antwerp opened a “cutting-edge, proprietary” facility at the Diamond Technology Park in Botswana’s capital of Gaborone.

Botswana said that Okavango Diamond Company, the state-owned diamond seller, will supply the new factory with rough.

HB Antwerp also has a deal with Lucara Diamond, owner of the Karowe mine in Botswana, to buy all the big diamonds produced by Karowe. HB has said that this model—which involves HB taking diamonds on credit, then calculating the end price based on their final sale—has led to increased revenue for Botswana.

While HB Antwerp’s statement didn’t mention De Beers, media outlets portrayed it as another warning sign that Botswana and De Beers’ five-decade partnership could be on the rocks. (Botswana also owns 15% of De Beers.)

Botswana president Mokgweetsi Masisi said the factory’s opening “had the potential to be a game-changer.…

“Together [with HB] we have created an entirely new business model for mineral infrastructure, radically upending the narrative on how extractive industries can work with and for countries of origin to bring greater shared economic development and prosperity. Once we decided that it was time to change course, we knew we needed to fundamentally alter our way of working, and find partners who shared this vision.”

Rafael Papismedov, HB Antwerp co-founder, added in a statement: “Our success has come—and will continue to come—from our fearless willingness to challenge every aspect of the way things have been done to date and to recognize value where others have overlooked it.”

Botswana, the world’s leading diamond producer by value, and De Beers signed a 10-year sales and mining contract in 2011. That deal has since been renewed three times and is due to expire again in June.

In February, Masisi said that if a new agreement is not reached, “each party will have to pack its bags and go.”

De Beers has generally expressed confidence a new deal will be reached.

Duncan Wanblad, CEO of Anglo American (De Beers’ 85% owner), recently told analysts, “The vast majority of all the elements of the negotiation have been completed. There is only one outstanding work stream, and that is where the team is working at the moment.”

He added negotiations were held “in good spirits both sides of the fence.”

Top: Botswana president Mokgweetsi Masisi, with first lady Neo Masisi, touring the new HB facility (Photo courtesy of the government of Botswana)

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By: Rob Bates

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