By Ethan Malibongwe Moyo
Are Diamonds Forever?: Why Angola and Botswana Trying to Buy De Beers Is a Strategic Mistake
The news that Angola and Botswana are considering a joint bid to buy De Beers has generated excitement across the continent. On the surface it looks like a historic reclamation of African mineral wealth. But when you look closely at what is happening in the global diamond market and at the economic priorities of both countries, the move is not visionary. It is deeply misguided.
The biggest problem is simple: the diamond market has changed forever. Natural diamonds no longer hold the power they once did. Over the past five years, prices of natural diamonds have collapsed, with some categories dropping 50 to 60 percent, especially smaller commercial stones. This is not a temporary dip. It is a structural shift driven by technology.
Lab grown diamonds have rewritten the rules. They now command 15 to 20 percent of the global jewellery market, and in engagement rings, the most important segment, they are capturing 40 to 50 percent of sales in the United States, China, India and parts of Europe. They are chemically identical, cheaper, ethically appealing and infinitely scalable. This has destroyed the old De Beers model built on scarcity and price control.
But the shock goes deeper. In the industrial diamond market, lab grown diamonds have completely taken over. Nearly 99 percent of industrial diamonds used for drilling, cutting, polishing, electronics, heat spreaders and quantum technologies are now synthetic. Natural industrial diamonds are essentially obsolete. The high tech future of diamonds, including semiconductors, quantum chips and diamond batteries, belongs entirely to laboratory production. Mining companies have no competitive edge here.
It is against this backdrop that Angola and Botswana want to buy De Beers, an empire built for a world that no longer exists.
This is especially worrying because both countries have more urgent and future oriented economic priorities. Angola should be focusing on expanding its oil refining capacity. The country exports crude and imports fuel, losing billions in value every year. By building refineries and selling processed fuel to the region, Angola could create a stable and scalable industrial base with far higher returns than diamonds can ever offer in the coming decades. Buying De Beers would divert resources from this critical national transformation.
Botswana is already dangerously over reliant on diamonds. The country should be investing aggressively in diversification: technology, financial services, manufacturing, energy and value added industries. Buying De Beers would not strengthen Botswana’s diamond revenues. It would trap the country inside a fading sector just as the global market shifts toward synthetics and branded jewellery.
Then there is the cost. Anglo American has valued De Beers at roughly 4.9 billion United States dollars after writing down its value by nearly 3 billion due to collapsing demand and weak pricing. They now carry it on their books at about 4.1 billion dollars. When a multinational writes down one of its crown jewels that aggressively, it is not offering a bargain. It is signalling decline. Angola’s finance minister has already stated that the national budget will not fund the bid, which means this acquisition would require debt, private consortium financing or risky restructuring.
If African nations want real economic sovereignty, the answer is not to inherit a shrinking business built on a 1950s market structure. The future lies in refining, manufacturing, technology, renewable energy, advanced materials and high value supply chains. Lab grown diamonds are reshaping the industry. Natural diamonds will survive, but they will never again dominate global jewellery or industrial sectors the way they once did. De Beers, for all its history, cannot reverse that trend.
Buying De Beers today is like buying a film camera company in the age of digital or a typewriter company in the age of smartphones. It may feel symbolic or patriotic or historic, but symbolism cannot overturn market physics.
If Angola and Botswana want to build real power, they should invest in the future, not in the remnants of the past.
Image credit; The African Dream