De Beers Sale Talks Underway
Hit by Slowing Chinese Demand and Lab-Grown Diamonds
Market Trend Diverges from Gold and Silver Rally
De Beers, which once dominated the global diamond market, is reportedly in the process of being sold. The news comes as the diamond market continues to struggle while gold and silver prices are surging.
According to major foreign media outlets on the 9th (local time), Duncan Wanblad, CEO of Anglo American, the British mining company that is the largest shareholder of De Beers, said in a recent interview that discussions on the sale of De Beers are at an advanced stage. CEO Wanblad noted that "there is a possibility that De Beers will be sold to a consortium involving both the government and the private sector," adding, "The diamond market environment is not favorable, but we hope the sale will be completed within this year."
Founded in 1888, De Beers is a company with 138 years of history that has long exerted overwhelming influence over the global diamond market. Anglo American had previously stated that it aimed to either sell De Beers or complete an initial public offering (IPO) by the end of last year. The push to sell De Beers is known to be part of a restructuring plan that Anglo American has been pursuing since it fended off a hostile takeover attempt by rival BHP in 2024.
However, analysts say that the immediate backdrop to the full-fledged sale talks is the prolonged slump in the diamond market. The market has been struggling because luxury consumption has slowed in China, one of the largest consumer countries, and because lab-grown diamonds, which have strong price competitiveness, are rapidly eating into market share.
On top of this, the fact that the United States imposed import tariffs last year on products from India, a major diamond-processing country, has also added pressure on the industry.
The downturn in the diamond market stands in sharp contrast to the recent strength in gold and silver prices. Last year, international gold prices rose by about 65%, while silver prices soared by more than 150%, continuing a steep rally.
Currently, several African countries are reported to be interested in acquiring a stake in De Beers. The government of Botswana holds a 15% stake in De Beers, and President Duma Boko of Botswana has repeatedly expressed his intention to increase that stake.
The Angolan government has also shown interest in acquiring a partial stake, and Namibia, which accounts for about 10% of De Beers' diamond production, is reportedly reviewing whether to participate in the bidding.
CEO Wanblad said that it is highly likely that the government of Botswana will secure an additional stake.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
