Staff Writer
The government is said to be considering acquiring a 5% to 10% equity stake in De Beers, a move that could cost up to N$2.77 billion at a time when national diamond revenues have plummeted by 93%.
A newly released briefing note reveals that while the financial returns of the investment remain highly speculative, the strategic leverage gained could offer a vital lifeline to the country’s downstream diamond industry.
The potential state acquisition comes amid a major ownership shakeup at De Beers.
A private consortium led by former De Beers chief executive officer Gareth Penny is poised to buy Anglo American’s 85% controlling share for US$1 billion, injecting an additional US$500 million in new capital.
The deal implicitly values the global diamond giant at US$1.68 billion, a steep drop from its historical valuation of over US$12 billion.
Financing a 10% stake would require Namibia to borrow heavily through state bonds.
Analysts caution that the investment will only outperform standard government bonds if De Beers engineering a massive financial turnaround, hitting an annual EBITDA of US$549 million by 2031.
Achieving that target will be an uphill battle. De Beers’ profitability has collapsed in recent years due to a severe market downturn and fierce competition from lab-grown stones.
The company recorded a massive EBITDA loss of US$511 million in 2025, followed by another US$113 million loss in the first half of 2026.
Furthermore, Namibia’s local diamond mining venture, Namdeb, recently requested an emergency government recapitalisation after its own revenues fell 60% below projections.
Despite the bleak financial metrics, proponents argue that the strategic value of the deal transcends direct monetary returns.
Diamonds remain a cornerstone to the Namibian economy, historically representing 40% of export earnings and supporting thousands of local jobs.
Currently, Namibia owns half of its local mining operations but holds no voting power over De Beers’ global corporate decisions.
A 5% to 10% stake would secure Namibia a crucial “seat at the table,” providing an inside view of global pricing, inventory, and marketing strategies.
Crucially, the equity deal could provide much-needed leverage to renegotiate Namibia’s 10-year diamond sales agreement, which expired in May 2026.
Neighbouring Botswana successfully leveraged its positions to secure a phased increase to 50% of local production, and Namibia hopes to secure a larger allocation for its state-owned marketing arm, Namdia, alongside guaranteed rough diamond supplies to protect 1 100 local factory cutting and polishing jobs.
However, regional analysts warn that a 5% to 10% share leaves Namibia as a junior partner with limited visibility, while private investors retain absolute control.
If negotiations proceed, experts stress that Namibia must firmly condition its investment on securing specific legal guarantees.
These include mandatory board representation, strict consent rights over any potential closures or asset sales at Namdeb, and ironclad protection against forced capital calls if De Beers continues to bleed cash.
