Botswana’s government has confirmed it wants to acquire a controlling stake in diamond giant De Beers, as majority owner Anglo American (LSE: Ticker, JSE: AGL) moves ahead with plans to divest its 85% shareholding.

The landlocked Southern African country is the world’s leading producer of gem-quality diamonds, with the sector contributing about 30% of GDP and up to 80% of export earnings. It is seeking majority control of De Beers to secure downstream leverage.

Mines Minister Bogolo Kenewendo told the Financial Times that President Duma Boko “remains resolute in his quest to increase Botswana’s stake in De Beers to ensure Botswana’s full control over this strategic national asset and the entire value chain, including marketing.”

Botswana currently holds 15% of De Beers and jointly owns Debswana with the company, a venture that supplies the bulk of De Beers’ rough diamonds. Anglo American has said it is considering either a sale or a separate listing of its De Beers stake as part of a wider restructuring. The government has pressed Anglo for more transparency in the process, with Kenewendo warning that “any sale without our support will be difficult to achieve.”

The government insists that financing “is not an issue,” according to the FT, though analysts have expressed scepticism given Botswana’s limited fiscal space and the scale of the potential acquisition.

For the financial year 2024/25 (running April to March), Botswana’s budget deficit was estimated at 9.0% of GDP. For 2025/26, the government has projected a deficit of 7.56% of GDP, raising questions about how the deal would be funded.

Bloomberg reports that Botswana is in talks with a sovereign wealth fund in Oman, among others, to help finance an acquisition to boost the state’s interest in De Beers above 50%, President Duma Boko said.

“We are more than ready for the transaction and we’ve said the transaction must be concluded by the end of October,” Boko said in an interview with Bloomberg TV in New York. “It’s a matter of economic sovereignty for Botswana.”

About 70% of De Beers’ revenues derive from Botswana operations via Debswana. Securing majority control would give the country more leverage over pricing, marketing and royalty flows, cementing the industry’s role in national development.

However, the global diamond market is under pressure. The FT noted that demand has softened in key consumer markets, inventories are high, and lab-grown diamonds are eroding market share.

According to Bloomberg, De Beers is vying with Russia’s Alrosa PJSC to be the world’s largest diamond producer. In late 2024, Omani state-backed fund Maaden International Investment LLC acquired Alrosa’s stake in a diamond-mining venture in Angola, Africa's second-largest producer by volume, the news agency noted.

Anglo has received indications of interest from potential buyers, including two former chief executive officers of De Beers, Bloomberg reported in June.