Botswana is less than two weeks away from a key deadline in London-listed diversified miner Anglo American's (LSE/JSE: AAL) sale of its 85% stake in diamond producer De Beers Group, with government due diligence on the competing bids expected to be completed this month as the process moves towards a decision on the diamond group's future ownership.

The government, which owns 15% of London-headquartered De Beers, has been assessing whether to participate alongside a preferred bidder identified by Botswana or exercise its pre-emption rights over Anglo's 85% stake, either alone or with another partner. Botswana appointed Lazard and Switzerland's CBH Bank to advise on the transaction.

Botswana's Minister for State President, Defence and Security Moeti Mohwasa told lawmakers in July that Anglo had run a competitive process involving three shortlisted bidders and had identified the Global Diamond Consortium, led by former De Beers chief executive Gareth Penny, as its preferred bidder.

Anglo has subsequently given a more cautious account. Chief executive Duncan Wanblad said the miner was not in exclusive negotiations with any particular consortium and that more than one bidder remained in contention.

"We are not exclusive with any particular consortium at this particular point in time, and there is certainly more than one in the process," Wanblad said following Anglo's interim results in late July. Anglo said on July 30 that the sale was "advancing", while Wanblad said the company was in the final stages of the divestment and hoped to sign a deal by the end of 2026.

Penny headed De Beers from 2006 to 2010 and is now chairman of asset manager Ninety One (LSE: N91; JSE: N91). The Global Diamond Consortium's proposal envisages participation by fellow African diamond producers Angola and Namibia.

Reuters has reported that two consortia remained in contention, down from six in 2025, with participants across the competing groups including Penny, a Qatari investment fund, Israeli diamond businessman Nir Livnat and governments of diamond-producing countries. Livnat is executive chairman of diamond company Diacore.

Botswana's economy tied to De Beers

The approaching deadline is particularly significant for Botswana because diamonds are the country's dominant export and De Beers is deeply integrated into its economy. Botswana also owns 50% of Debswana, its diamond-mining joint venture with De Beers.

De Beers produces about 70% of its diamonds in Botswana, while diamonds account for about 80% of the country's exports and roughly a quarter of gross domestic product. Debswana is also one of Botswana's largest private-sector employers, with about 5,000 employees and 6,000 contractors.

The pending ownership decision comes shortly after Botswana and De Beers signed a new 10-year sales agreement in February 2025 and extended Debswana's mining licences for 25 years, from August 2029 to July 2054. The agreement progressively increases the share of Debswana production available to state-owned Okavango Diamond Company and establishes a Diamonds for Development Fund to support economic diversification.

De Beers committed BWP1bn ($75mn) in initial capital, with further annual contributions from its Debswana dividends based on the mining company's performance. Botswana has said the intention is to grow the fund to BWP10bn over 10 years.

De Beers valuation plunges

The transaction could also crystallise the sharp decline in De Beers' value during the diamond-market downturn. Bloomberg reported in July that Anglo was discussing a deal worth about $1bn for its 85% stake, with the Global Diamond Consortium potentially injecting a further $500mn into the business.

On the basis of that roughly $1bn transaction value, Anglo's holding would imply a valuation of about $1.2bn for all of De Beers and put the value of Botswana's existing 15% stake at about $176mn.

That compares with De Beers' carrying value of $2.3bn at the end of 2025 and an implied valuation of about $12.75bn when Anglo agreed in 2011 to pay $5.1bn for the Oppenheimer family's 40% stake.

Independent diamond analyst Paul Zimnisky has said new ownership could provide De Beers with fresh leadership and strategy, but cautioned that a change of ownership alone would not resolve structural pressures facing natural diamonds, including weak consumer demand and competition from lab-grown stones.

De Beers reported an 88% year-on-year increase in rough diamond production to 7.8mn carats in the second quarter of 2026, driven by higher output from Botswana and Canada. First-half production rose 46% to 14.91mn carats from 10.2mn carats a year earlier. The sharp increase partly reflected an extended maintenance shutdown at the Orapa mine in Botswana in 2025. Output was also supported by the planned processing of higher-grade ore at the Jwaneng mine in Botswana and the Gahcho Kué operation in Canada.

De Beers reported an underlying EBITDA loss of $113mn in the first half of 2026 amid the prolonged diamond-market downturn. Anglo is seeking to separate the business as part of a restructuring designed to focus the group on copper, premium iron ore and crop nutrients.

Botswana expects the De Beers transaction could be concluded in the fourth quarter of 2026, with completion of the government's due diligence at the end of September set to determine its next move in the sale.