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Ministry of Minerals, Energy and Water Resources (MMEWR)
Sale of Central Holdings Limited (CHL) Shares in De beers to...
Sale of Central Holdings Limited (CHL) Shares in De beers to Anglo American

1.    The Government of the Republic of Botswana (GRB) wishes to announce its decision not to take up its pre-emptive rights to acquire an additional shareholding in De Beers, following the receipt of a formal pre-emption offer from the Central Holdings Limited, CHL (the “CHL Transfer Notice”) dated 26 July 2012.


2.    Under the terms of the Shareholders’ Agreement between Anglo American, CHL (representing the Oppenheimer family interests) and the GRB, the GRB had pre-emption rights in respect of CHL’s interest in De Beers, enabling it to increase its interest in De Beers, on a pro rata basis, to up to 25% at a cost of US $1.275 billion.


3.    The $1.275 billion which is equivalent to about P9.8 billion represents about 10% of the Gross Domestic Product (GDP), a large cost for a country whose government budget is still in deficit, and is trying to bring the budget to balance within a year and a half.


4.    Such a purchase would, inevitably:

                               i.        push back the restoration of balancing the budget

                              ii.       drain the  country’s international reserves.

                             iii.     raise the government debt to GDP ratio thus precluding the Government from raising additional debt in the international markets for other projects.,


5.    In conclusion, the diamond industry is a major contributor to the economy, of Botswana through shareholding in Debswana Diamond Company and DTC Botswana and De Beers is the world’s premier diamond company. We look forward to building on the excellent relationship we have with Anglo American, both through our ownership of De Beers and through the Debswana joint venture, and to sharing in De Beers’ highly attractive long term prospects.


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