The Shifting Sands of Diamond Power: How Angola and Botswana Are Rewriting the Rules of the Industry
The diamond industry is bracing for a power shift. For decades, De Beers has reigned supreme, but a confluence of factors – declining revenues, changing consumer preferences, and a strategic retreat by its parent company, Anglo American – is creating an unprecedented opportunity for African nations to seize control. Botswana and Angola, traditionally reliant on De Beers, are now actively vying for a larger stake, not just in the company itself, but in the future of the entire diamond value chain. This isn’t simply a commercial transaction; it’s a potential reshaping of economic power on the continent.
The Decline of a Diamond Giant
De Beers, once synonymous with diamond dominance, is facing headwinds. Revenues have plummeted from $6 billion in 2022 to $2.7 billion in 2024, accompanied by a 26% drop in production and inventory levels not seen since 2008. This downturn isn’t solely due to market fluctuations. The rise of lab-grown diamonds, offering a cheaper and ethically sourced alternative, is eroding demand for natural stones, particularly among younger consumers. According to McKinsey, rough diamond prices have halved in the last two years, forcing De Beers to reassess its strategy.
“The lab-grown diamond market is no longer a niche threat; it’s a mainstream competitor. De Beers’ traditional marketing narrative of rarity and exclusivity is being challenged, and the company needs to adapt or risk further decline.” – Dr. Anya Sharma, Gemological Economist.
Botswana’s Bold Move: Securing a National Asset
Botswana, where nearly 70% of De Beers’ diamonds originate through the Debswana joint venture, is leading the charge for greater control. President Duma Boko has publicly stated his intention to acquire a majority stake in De Beers, viewing it as crucial for diversifying the nation’s economy and maximizing local value. The country is actively seeking funding partners, including an Omani sovereign fund, to finance this ambitious undertaking. This isn’t just about financial gain; it’s about securing a vital source of revenue – diamonds account for roughly a third of Botswana’s tax income and 80% of its exports – and mitigating the risks associated with over-reliance on a single commodity.
De Beers acquisition is a strategic imperative for Botswana, aiming to strengthen local cutting and polishing industries and reduce its vulnerability to the “Dutch disease,” a phenomenon where resource wealth hinders the development of other economic sectors.
Angola’s Ascent: A New Challenger Emerges
Angola, historically overshadowed by Botswana in diamond production value, has quietly been gaining ground. In 2024, it surpassed Botswana for the first time in two decades, with diamond values reaching $1.41 billion compared to Botswana’s $1.36 billion. This shift isn’t necessarily due to a surge in Angolan production, but rather a decline in Botswana’s output. Angola is now presenting a “fully funded offer” for a strategic stake in De Beers, positioning itself as a partner alongside Botswana and other producing nations. Minister Diamantino Pedro Azevedo emphasizes a collaborative approach, advocating for a partnership that prevents any single entity from dominating the industry.
Did you know? Angola’s diamond industry is undergoing significant modernization, with increased investment in exploration and technology aimed at boosting production and efficiency.
The Implications of a Multi-Polar Diamond Landscape
The potential for Botswana and Angola to gain significant influence over De Beers has far-reaching implications. It could lead to:
- Increased Local Value Addition: Greater African ownership could incentivize the development of cutting, polishing, and jewelry manufacturing industries within the producing nations, creating jobs and boosting economic diversification.
- Shifting Power Dynamics: A more equitable distribution of profits could empower African countries to invest in infrastructure, education, and healthcare.
- Greater Transparency and Accountability: Increased African representation on the De Beers board could lead to more responsible and sustainable mining practices.
- Competition and Innovation: The entry of new investors, including Indian billionaires and Qatari investment funds, could inject fresh capital and drive innovation within the diamond industry.
The Anglo American Factor and the IPO Possibility
Anglo American’s decision to divest from De Beers is the catalyst for this upheaval. The company is focused on becoming a global leader in critical minerals, and diamonds no longer fit its strategic priorities. Anglo American is exploring various options, including a direct sale, a spin-off followed by an Initial Public Offering (IPO), or a merger with Teck Resources. Analysts estimate De Beers’ value between $3 billion and $5 billion, a significant discount reflecting the current market challenges. A potential IPO in mid-2026 could open the door for a wider range of investors, further complicating the landscape.
Navigating the Lab-Grown Diamond Disruption
The rise of lab-grown diamonds isn’t just a threat to De Beers; it’s a fundamental shift in consumer behavior. Traditional diamond marketing focused on rarity and emotional value. Lab-grown diamonds offer a compelling alternative for consumers seeking affordability, ethical sourcing, and verifiable quality. De Beers has responded by launching its own lab-grown diamond brand, Lightbox, but its success remains to be seen. The key for both natural and lab-grown diamond producers will be adapting to evolving consumer preferences and embracing transparency throughout the supply chain. See our guide on sustainable sourcing in the jewelry industry for more information.
Frequently Asked Questions
Q: What is the Kimberley Process and why is it relevant?
A: The Kimberley Process Certification Scheme is an international initiative designed to prevent “conflict diamonds” from entering the mainstream market. It plays a crucial role in ensuring the ethical sourcing of diamonds and maintaining consumer confidence.
Q: How will the potential acquisition of De Beers by Botswana and Angola impact diamond prices?
A: It’s difficult to predict with certainty. Increased African control could lead to more stable pricing in the long term, but short-term volatility is possible as the ownership structure evolves.
Q: What role will private investors play in the future of De Beers?
A: Private investors, such as Indian billionaires and Qatari funds, could provide crucial capital and expertise, but their influence may be limited by the desire of Botswana and Angola to maintain control.
Q: What does this mean for consumers?
A: Consumers may see increased transparency in the diamond supply chain and potentially more affordable options, particularly as the lab-grown diamond market continues to grow.
The coming months will be pivotal in determining the future of De Beers and the broader diamond industry. The interplay between African nations, Anglo American, and a growing pool of private investors will shape the landscape for years to come. The stakes are high, not just for the companies involved, but for the economies of Botswana, Angola, and the millions of people who depend on the diamond trade. What will be the ultimate outcome? Only time will tell, but one thing is certain: the diamond industry is entering a new era of uncertainty and opportunity.
What are your predictions for the future of the diamond industry? Share your thoughts in the comments below!
