De Beers sale: A diamond is forever, but Limpopo’s jobs might not be

0 Venetia mine in Limpopo is De Beers’ only operation in South Africa. Image: Pexels Home » Business & Finance » De Beers sale: A diamond is forever, but Limpopo’s jobs might not be

The De Beers sale has a price tag that would have been unthinkable 25 years ago. But for one corner of Limpopo, the real worry runs deeper.

0 Venetia mine in Limpopo is De Beers’ only operation in South Africa. Image: Pexels The De Beers sale is edging towards the finish line, and the price tag says a lot.

A company born in Kimberley in 1888 is reportedly changing hands for a fraction of its former worth.

For workers in Limpopo, though, the bigger question isn’t the price.

Anglo American owns 85% of De Beers.

The Botswana government owns the remaining 15%.

Anglo put the diamond giant up for sale in May 2024.

Since then, falling diamond prices and the rise of lab-grown stones have dragged its value down sharply.

In the last week of October, members of the leading bidding group reportedly met Anglo and Botswana representatives in London to iron out differences over the terms.

A key sticking point is Botswana’s share.

The country is weighing raising its stake from 15% to about 25%.

The final ownership structure, financing and binding terms all remain unresolved.

In July, Botswana’s government said the Global Diamond Consortium was Anglo’s preferred bidder.

Chief executive Duncan Wanblad has said the company is not exclusive with any bidder.

The consortium is led by Gareth Penny, who ran De Beers from 2006 to 2010.

It includes the governments of Namibia and Angola and several major diamond traders.

In July, Bloomberg reported that the deal could be worth about $1 billion (R16.5 billion).

That would be $750 million (R12.4 billion) up front and $250 million (R4.1 billion) later, plus performance-based payments. The terms are not final.

In 2001, De Beers was valued at $17.6 billion (R290 billion).

In October, luxury group Richemont, chaired by South African billionaire Johann Rupert, was reportedly in talks to join the consortium as a minority investor.

US jewellery retailer Signet Jewelers was also named in those reports.

South Africa’s exposure centres on Venetia mine, near Alldays in Limpopo. Venetia is De Beers’ only South African mine. It produces about 40% of the country’s diamonds.

In July, De Beers announced a two-year production pause at Venetia to cut costs.

The National Union of Mineworkers (NUM) says 1,134 permanent jobs at the mine are at risk.

Another 80 jobs at De Beers’ sorting facility in Johannesburg are also under threat.

Most of Venetia’s workers live in the Musina and Blouberg areas of far northern Limpopo.

For those communities, the mine is a vital source of income.

Unlike Botswana, South Africa holds no stake in De Beers and has no right of first refusal.

Its main leverage would likely come through regulators.

Section 12A of the Competition Act requires authorities to consider “the effect that the merger will have on” a list of factors, including “employment”.

Wanblad told CNBC in July that the company was “very much at the final stages” of the sale.

Even then, regulators around the world could take about a year to approve the deal.

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