The decision by the Oppenheimer family to sell their 45 percent shares in De Beers to Anglo American has left the opposition collective not only apprehensive but with so many unanswered questions.
The Leader of Opposition, Botsalo Ntuane, in his reaction to the State of the Nation address, did not only sound apprehensive about Oppenheimer family’s decision but suspected De Beers might have negotiated in bad faith before signing the ten-year diamond sales agreement with Botswana.
“We suspect there is more to this abrupt development than what as partners we are being told. It certainly raises eyebrows how a family that has been running De Beers for three generations could simply give it all up, especially if, as we were told the long term prospects for the diamond industry remain attractive,” he said.
What gets Ntuane all the more worried is that soon after signing the new Debswana Sales Agreement with the government, the Oppenheimers quit.
“Why are the Oppenheimers quitting? Do they know something the government of Botswana does not know?” he asked.
Ntuane urged government to monitor the situation closely saying the move could be an expression of concern over the state of the diamond market.
There is speculation that the 10-year Sales Agreement could be the reason for the Oppenheimers’ decision.
To drive his point home, Ntuane made reference to an industry publication ‘Diamond Intelligence Briefs’, in which journalist cum mining expert, Chaim Even Zohar, reveals that the agreement contains a clause allowing Botswana to re-negotiate the contract in the event that control in De Beers changes hands.
“Now that control has changed hands, what does it mean for us as a country?”
At the risk of sounding like conspiracy theorists, could this be a strategy for De Beers to wiggle out of the agreement in order for new terms to be re-negotiated which may reduce the benefits due to Botswana as per the original contract. What does this all mean for the migration of all rough diamond sales functions from London which was earmarked for 2013?
Ntuane begged to know if Botswana enjoyed a casting vote with her15 percent shareholding in De Beers Holdings, with Anglo American at 45 percent and the Oppenheimer family holding 40 percent what happens to the boardroom equation with Anglo American now holding 85 percent and the Botswana government still holding its now decidedly insignificant shareholding?
“We learn from within the industry that Botswana government can participate in the transaction by hiking its shareholding to 25 percent. Is that what government intends to do?” the legislator asked.
“There are all kinds of questions and ramifications and the nation needs to be appraised in more detail. This is a critical matter on which we will be constantly demanding answers from the government because we have grounds for deep concern given the secretive nature of the agreements signed between government and De Beers over the years,” Ntuane said.