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Anglo American considers spin-off as Botswana keen on De Beers’ stake increase

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President Mokgweetsi Masisi of Botswana told JCK News that the country may increase its ownership stake in the world’s largest diamond miner, De Beers, following the announcement by parent firm Anglo American that it intended to spin off or sell the company.

De Beers is 15% owned by the government, and 70% of the company’s yearly supply of raw diamonds comes from Botswana.

To stave off an acquisition by larger rival BHP Group, Anglo revealed a radical evaluation of its operations that included selling or divesting the diamond business to concentrate on copper, iron ore, and a fertilizer project in the UK.

Masisi stated that, should it occur, Anglo’s sale of De Beers would be “the best thing” to JCK in Las Vegas. According to Masisi, “if it’s attractive to,” the government may increase its stake in De Beers. This was stated by the online diamond news station. The government would protect its interests in diamond mining, the president said in a May interview with CNBC Africa.

An IPO for the diamond industry is one of the strategies Anglo may take into consideration, according to Reuters, which quoted sources on May 14.

Like other luxury goods, diamond prices have been hammered by a slump in global demand. De Beers has been limiting supply and offering flexibility to contracted customers. In February, Anglo announced a $1.6 billion impairment charge, on De Beers. Anglo acquired De Beers in 2011, buying the Oppenheimer family’s 40% stake for $5.1 billion.

Masisi told JCK News Botswana’s ideal partner in De Beers would be a long-term investor. The government will try to keep the “bad guys out” and wants investors whose vision is aligned with the government’s.

“One of the characteristics of a bad owner is someone who has impatient capital,” Masisi said. “This industry requires somebody who is in it for the long-haul, because it has its ups and downs.”

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Zambia to establish unit for mineral trading, investing

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To increase its revenue from its natural resources, Zambia will establish a new company for investment and mineral trading, the cabinet announced on Wednesday following approval.

According to the statement, the government of Zambia, the second-largest copper producer in Africa, would create a Special Purpose Vehicle (SPV) for trading and investment purposes. Through ZCCM Investment Holdings, the government currently owns many mining assets.

The new entity would help Zambia “move away from the dividend payment model for mineral resources and adopt a production-based sharing mechanism to ensure benefits accrue to the people of Zambia beyond Statutory obligations,” the Cabinet said.

 

It further stated that the new business model will guarantee accurate disclosure of mineral consignments intended for export and internal consumption, permit the government to negotiate mineral prices, and share produced minerals.

10% to 20% of mines, including those controlled by Barrick Gold, Vedanta Resources, and First Quantum Minerals, are owned by ZCCM. It recently retained the remaining 51% of Mopani Copper Mines after selling the remaining portion to a division of United Arab Emirates International Holding Company.

Paul Kabuswe, Zambia’s minister of mines, told Reuters in February that Zambia intended to negotiate bigger stakes in new mining operations to increase revenue and encourage investment in social programs.

The nation aims to produce 3 million metric tons of copper annually within the next ten years as the demand for metal rises in the building and electricity sectors. In 2023, the nation produced 698,000 metric tons of copper, down from 763,000 metric tons the year before.

The production of copper decreased from 763,000 tons the year before to 698,000 tons the following year, according to the Zambia Chamber of Mines.

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Kenya’s govt authorizes sale of its stakes in 6 publicly traded firms

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According to President William Ruto’s office, the Kenyan cabinet has accepted a government proposal to sell shares it owns in six listed companies, including the nation’s stock exchange and a cement manufacturer.

The government will sell its holdings in battery manufacturer Eveready East Africa, Nairobi Securities Exchange, HF Group, Stanbic Holdings, Liberty Kenya Holdings, and East African Portland Cement, according to a statement released late on Tuesday by Ruto’s office.

 

The National Social Security Fund owns 27% of East African Portland, while the government owns a direct 25.3% share. The government holds 1.1% of Stanbic Holdings, 0.9% of Liberty Kenya Holdings, 2.41% of HF Group, 3.36% of Nairobi Securities Exchange, and 17.2% of Eveready.

This action is in line with government intentions to sell off stakes in further state-owned businesses. After passing a bill in October to provide guidelines for the process, Ruto said in November that the government intended to privatize 35 state-owned businesses.

 

But in December of last year, the opposition party filed a lawsuit to oppose the plan, arguing that some of the enterprises being sold had vital national interest and should only be sold with public approval. As a result, the plan encountered difficulties.

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