Diamonds: Angola Makes An Offer On De Beers

With this announcement, Angola is shaking up the global diamond market, which has been in crisis since 2022. After years of rapid expansion, the former Portuguese colony produced 10.7 million carats in the first nine months of the year and is aiming for a new record of 14.8 million carats by 2025. With 14 million carats of rough diamonds produced in 2024, the country now ranks above Botswana in terms of volume produced for the first time in twenty years, according to the Kimberley Process.

These figures, fueled by the gigantic Catoca open-pit mine and other deposits, reflect a national strategy of resource industrialization.

In this context, Endiama, Angola's national diamond company, has made an offer to buy Anglo American's majority stake (85%) in De Beers. The parent company has announced its intention to sell its shares as part of a restructuring plan launched in 2024. If this major financial transaction were to be finalized, it would represent a revolution for the industry.

While Anglo American is currently the majority shareholder, the Botswana government owns the remaining 15% and has indicated since September its desire to increase its stake to more than 50%. Botswana generates about one-third of its tax revenue and 80% of its exports from diamonds, while Angola is seeking to diversify its economy, which is still heavily dependent on oil.

What consequences could Angola's takeover of De Beers have? Firstly, the initial impact would be on the high-end jewelry market: De Beers remains a key player in the sector (with revenues of $2.7 billion in 2024 and a valuation of $4.9 billion), capable of exerting pressure on the supply and sales schedule for rough diamonds. The group accounts for between a quarter and a third of the global supply of rough gems, giving it a decisive role in setting prices and determining the availability of high-quality stones.

In terms of the African economy, the benefits would be immediate and long-lasting: resources could remain more localized on the continent, as could related activities (such as cutting and polishing). Tax revenues and industrial employment could also grow: the shift is all the more significant given that Botswana has reduced its production in recent years, weakening its revenues while Angola has been gaining momentum.

However, some issues remain to be clarified: First and foremost, it would be necessary to understand how this acquisition would be financed, given that the Luanda government has indicated that the national budget would not finance the operation. The risk of diplomatic tension with Botswana is also an issue to be taken into account.

From a broader perspective, if De Beers were to come under Angolan influence, it would be good news for Africa, as the local African market would then be boosted. However, it could also lead to greater instability in the global diamond market, which is already struggling to find a balance in the face of weaker demand due to major geopolitical instability affecting the planet and increased competition from lab-grown diamonds.