Botswana has selected the Gareth Penny-led Global Diamond Consortium (GDC) as its preferred buyer for Anglo American’s (LON: AAL) controlling stake in De Beers, but President Duma Boko’s demand to double the country’s ownership to 30% could complicate the $1 billion takeover.

Boko announced the decision Monday during his annual State of the Nation address in Gaborone. The consortium, led by the former De Beers CEO, had already emerged as Anglo’s preferred bidder for its 85% holding. Botswana’s endorsement clears a major hurdle because the government, which owns the remaining 15%, holds a right of first refusal over the sale.

“When this transaction is complete, Botswana’s shareholding in De Beers will double from the current 15% to 30%,” Boko said. “Botswana will become the single largest shareholder in De Beers, and with that comes greater influence in the strategic decisions for decades.”

The proposed acquisition would give Botswana greater influence over a company central to its economy as the natural diamond industry struggles with weak prices and competition from lab-grown stones. It also raises questions about how the consortium will divide ownership, finance the purchase and restore profitability at a business Anglo has struggled to sell.

Botswana’s proposed holding exceeds the roughly 25% stake previously discussed with the consortium. The final structure remains subject to negotiations, with Anglo and GDC yet to finalize binding transaction documents.

Boko’s target also falls short of the controlling stake he initially promised when the sale process began. He acknowledged criticism of that pledge but argued that becoming the largest individual shareholder would provide Botswana with “all the attendant rights and protections.”

Under the consortium’s offer, Anglo would receive $750 million upfront and $250 million in deferred payments, a source told Rapaport News on Tuesday. A further $500 million capital injection into De Beers remains under discussion. Neither Boko nor GDC has publicly disclosed financial terms.

Angola, Namibia on board

Angola and Namibia will participate alongside Botswana, Boko said. The consortium also thanked Oman for its support and partnership, suggesting a broader group of government investors.

“Botswana’s support represents a significant endorsement of our vision for the industry’s future,” Penny said. “We remain focused now on finalizing agreements with Anglo American as soon as possible.”

GDC identified its founders as Penny, who ran De Beers from 2006 to 2010, Saurin Parikh of Antwerp-based Diarough and Moshe Klein of New York-based Grandview Klein. Both companies are De Beers sightholders.

The consortium also referred to unnamed midstream and downstream partners but did not identify Pluczenik, US jewellery retailer Signet Jewelers or Swiss luxury goods group Richemont, all previously linked to the bid. 

Independent diamond analyst Paul Zimnisky has argued that bringing producers, investors and industry leaders together could help revive confidence in natural diamonds.

“I think having everyone on the same team is the best case scenario,” he told MINING.COM earlier this year. “Diamonds really need a strong front of united advocates right now.”

Beyond mined diamonds

Anglo’s efforts to exit De Beers form part of a broader restructuring focused on copper. The diamond producer’s valuation has plunged to $2.3 billion from almost $13 billion in 2011, reflecting prolonged weakness in natural gemstone demand and growing competition from synthetic alternatives.

Boko said Botswana assessed competing bids against five priorities: sustainable profitability, greater strategic influence, broader participation in the diamond value chain, limited public spending and the ability to complete a transaction under international regulations.

He also criticized De Beers’ marketing strategy, arguing that the company had failed to sustain the appeal of natural diamonds.

“At some point, De Beers seemed to have lost sight of what gives a natural diamond its value,” he said. “It stopped telling the natural diamond’s story. And the demand it had once done so much to create began to fade.”

Beyond jewellery, Boko identified De Beers’ synthetic-diamond business, Element Six, as a potential growth engine serving advanced manufacturing and artificial intelligence infrastructure.

He cited a $600 million joint facility in Georgia announced by US President Donald Trump and said he had discussed a technology partnership involving Element Six with US Commerce Secretary Howard Lutnick.

“Synthetics don’t belong around a beautiful woman’s finger,” Boko said. “They belong at the end of a drill bit.”

Anglo welcomed the progress while emphasizing that negotiations remain underway.

“We continue to work with the government of the Republic of Botswana, other governments and the Global Diamond Consortium towards agreeing binding transaction documents,” a spokesperson said.

De Beers CEO Al Cook welcomed Botswana’s intention to increase its ownership, pointing to the country’s longstanding role in shaping the business.

“Consumers take more and more of an interest in the places their diamonds come from,” Cook said, adding that new ownership could strengthen confidence in responsibly sourced stones.