HomeDiamonds & GemstonesBotswana declines US$1.26 billion De Beers rights

Botswana declines US$1.26 billion De Beers rights

Gaborone, Botswana — 01 August 2012 – Mining giant Anglo American has announced that it has lifted its stake in De Beers from 40% to 85%, after the Botswana government passed on its pre-emptive rights worth US$1.26 billion “’ a development that was widely expected by the market.

Miningmx reports that the way is now clear for Anglo American to conclude its US$5.1billion takeover of the Oppenheimer stake in De Beers, possibly in September, or earlier. The outcome was hailed by Cynthia Carroll, Anglo American CEO, who said the group looked forward to strengthening its relationship with the Botswana government.

In terms of a previous agreement, the Botswana government had the right to take up its pro-rata share of the Oppenheimer stake, which would have lifted its shares in De Beers to 25% from the current 15%. This would have left Anglo with a 75% stake in De Beers, and cost the Botswana government US$1.26 billion.

“The Botswana government already has control of its stake in Debswana so it may not make sense to follow its rights,” Miningmx quoted Des Kilalea, an analyst for RBC Capital Markets, as having said.

Botswana’s mines, energy and water resources minister, Ponatshego Kedikilwe, said: “We look forward to building on the excellent relationship we have with Anglo American, through our ownership of De Beers, through the Debswana joint venture, and by sharing in De Beers’ highly attractive long term prospects."

One of De Beers’ long-term prospects is new business that may open in the United States, although the last time it was able to practise unrestricted trade in the US was in 1948. This August, De Beers executives, who for years were banned from entering the US, even if with a ticket for Disneyland, will be setting about plans to roll out a new US business strategy.

Source: Miningmx. For more information, click here.