Botswana will struggle to raise cash for its share of De Beers rights

Botswana is compelled to honiour its agreement re its holdings in top diamond miner De Beers to take up rights that will cost it some $150 million despite being short of actual cash.

GABORONE, Botswana (Reuters) - 

Botswana is "compelled to honour" an agreement to support a rights issue by diamond producer De Beers, a minister said, though how the cash-strapped southern African nation will fund its share of the offering is unclear.

The world's largest diamond producer, 45 percent owned by Anglo American (AGLJ.J: Quote), wants to reduce its $4 billion debt pile by raising up to $1 billion of new equity. Botswana's share would cost it around $150 million.

"As a country dependent on diamonds we are bound to be compelled to honour the agreement that has been made in principle," Minerals, Energy and Water Resources Minister, Ponatshego Kedikilwe said.

But it is not clear how Botswana, where diamond exports plummeted to the point where the country had to seek a bailout from African Development Bank, will finance its part of the issue.

"We are in discussion with all our partners on how we can keep the company afloat," he said, given the firm's importance for projects the country is embarking on.

(Reporting by By Wanetsha Mosinyi; Editing by Tiisetso Motsoeneng, John Stonestreet)

SUBSCRIBE to Mineweb.com's free daily newsletter now.

Disclaimer

MINEWEB is an interactive publication, with rolling deadlines through each day, commencing in the Sydney morning,  and concluding, 24 hours later,  in the Vancouver evening.  If you believe your side of an issue deserves inclusion, but has failed to meet one of our deadlines, you are invited to notify the Editor in Chief in Johannesburg, and we will include you in our editing and expanding on our stories. Email him at alechogg@gmail.com

Print story      Email story      Subscribe to free newsletter

Back