President of Botswana Mokgweetsi Masisi Photo: Presidency of Botswana
Botswana's President Mokgweetsi Masisi has vowed to protect the country's interests, including its 15% stake in diamond giant De Beers, if BHP Group buys Anglo American.
Anglo owns the remaining 85% of De Beers, although it rejected BHP's offer that valued the mining company at about $39 billion.
Under the proposed deal, BHP, once a major diamond producer, said De Beers would undergo a strategic review. Anglo, the only major mining company with a large-scale diamond operation, is already considering the future of its division, which includes De Beers. Masisi said in a television interview with CNBC Africa in Dallas, Texas, on Wednesday that Botswana had not received any formal approach from either BHP or Anglo.
“We cannot voluntarily allow ourselves to become redundant and irrelevant,” the president said.
“Botswana will therefore respond in a way that protects its interests.”
Botswana's concerns could add to the list of challenges BHP chief executive Mike Henry faces in pulling off an ambitious but complex deal.
Antitrust authorities from China to South Africa to Japan are likely to scrutinize the deal that will create the world's largest copper producer.
BHP's proposals, which include plans for Anglo to spin off its Johannesburg-listed platinum and iron ore division before eventually acquiring the remaining assets, have already sparked opposition from some members of the South African government. There is.
The diamond industry came to a near-total standstill in the second half of last year, as De Beers and Russia's Alrosa, two major mining companies, nearly halted supplies in a desperate effort to stem the slump in prices. He is recovering.
This has hit the profits of De Beers, which mines more than three-quarters of its diamonds in Botswana.
“De Beers' value was fundamentally created by Botswana,” Masisi said. “No one can miss that.”
Botswana is the world's largest producer of rough diamonds by value, and its revenues account for the majority of the southern African country's budget income. Anglo estimates its total economic contribution to Botswana was $1.16 billion last year, almost half of which came from taxes and royalties.
De Beers agreed to hand over more diamonds to the Botswana government in negotiations concluded in the middle of last year, just before the latest deal expired.