DE BEERS AND DIAMOND INDUSTRY BASHING-GOOD FOR BOTSWANA?
Ronak Gopaldas and Menzi Ndhlovu, authors of an article that appeared in South Africa's Business Day newspaper make important points, and one cannot help but be flabbergasted by the turn of events.
Most worrying is the timing of the remarks and actions given Anglo's pending sale of shares in De Beers. One would expect the two shareholders (Botswana and Anglo plc) to act in unison and specifically in ways that are aimed at boasting the stock price rather than making disparaging remarks about the company or one another. A major risk is the likelihood of disincentivizing bluechip investors who may shy away from a partnership with Botswana for fear of falling prey to the same negative commentary. In which case the ultimate outcome could be a race to the bottom.
On the other hand, the market for rough diamonds is performing poorly and lab grown stones continue to undermine consumer confidence in natural gems. This begs the question, what possible logic can there be for Botswana's leader to undermine market confidence in the world's largest producer by value and the world's leading rough diamond marketing company at a time when the country is in dire need for revenue? After all,
is this not the same industry upon which the people of Botswana rely almost exclusively for their livelihood?
One must give the powers that be some benefit of the doubt but on face value it all appears counterproductive.
via @SheilaKhama on X