Angola looks to buy strategic stake in De Beers

Angola is pursuing a 20%-30% stake in diamond giant De Beers, reports Reuters, quoting a senior official from the country's mining ministry.

The value of De Beers - majority-owned by Anglo American - has been declining as the sale drags on.

Anglo announced in a production update last week that it may impair its stake in the company, for the third time. This is amid falling diamond prices and the global rise of synthetic stones.

Despite the decline in the value of De Beers, Anglo CEO Duncan Wanblad has said that no entity identified in its second phase auction process, now underway, is large enough to buy the company outright.

There are two key African players here from De Beers' perspective, says business specialist Rutendo Hwindingwi, considering that Botswana already owns 15% of the company.

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"Angola is also on this drive to diversify their economy and to move away from relying on oil. The government wanted to do a total buyout but they didn't want to get into a big fight from a shareholding perspective with Botswana, so their focus is now on buying a part of De Beers."

However, the Africa specialist says there are concerns over whether this really is the right strategy for a country looking to diversify at a time when diamond prices are low.

Scroll up to the audio player to listen to Africa Business Focus (De Beers discussion at 3:04)