Anglo American’s recent decision to slash the carrying value of its iconic diamond subsidiary, De Beers, by nearly half has sent shockwaves through the global diamond industry and raised urgent questions about the future of Botswana’s economy. The reduction from $4.1 billion to $2.3 billion, announced in Anglo American’s 2025 full-year results, marks the third significant impairment of De Beers in just three years. This staggering write-down reflects a grim reality: diamond prices, once seen as untouchable, are under sustained pressure from shifting market dynamics, including the rise of lab-grown alternatives and persistent oversupply. For Botswana, which relies heavily on diamonds for economic stability, the implications are profound and immediate.
The impairment of $2.3 billion before tax, equating to $1.8 billion after tax and other deductions, signals Anglo American’s recalibration of De Beers’ long-term valuation on the back of lowered diamond price forecasts. While De Beers reported a 6% increase in revenue to $3.49 billion in 2025, this figure remains subdued compared to previous years, underscoring the challenging environment the company navigates. The miner’s rough diamond sales rose in volume by 23% on a 100% basis to nearly 24 million carats, yet the average selling price fell by 7% to $142 million when consolidated. Special discounts to offload less in-demand stones further hammered the price index, which dropped 25% when these deals were included.
Underlying this financial turmoil is a widening loss for De Beers, with the underlying EBITDA loss ballooning to $511 million from a modest $25 million the prior year. Anglo American’s group net loss widened 22% to $3.74 billion, predominantly due to this impairment. The company’s annual report paints a picture of an industry grappling with oversupply, diminished demand, and a rapidly changing competitive landscape where synthetic diamonds increasingly chip away at De Beers’ traditional market stronghold.
Botswana, where De Beers operates its flagship diamond mines through the 50:50 joint venture Debswana, faces a particularly acute crisis. Diamonds have long been the lifeblood of Botswana’s economy, accounting for roughly 30% of the country’s GDP and approximately 80% of its exports. The stability and prosperity of Botswana for decades have hinged on the revenues generated by diamond mining and sales. Yet, against the backdrop of De Beers’ declining value and the global slump in diamond prices, Botswana is contending with a severe oversupply crisis. By the end of 2025, the country’s diamond stockpile had ballooned to nearly double its permitted level, exacerbating the downward pressure on prices and government revenues.
This diamond glut, coupled with the rising appeal and market penetration of lab-grown diamonds, has forced Botswana to reconsider its economic strategy. The government, which owns 15% of De Beers and half of Debswana, is grappling with the fallout from shrinking diamond revenues that threaten to choke off essential public services and infrastructure projects. Economic forecasts for Botswana have turned bleak, with projections indicating GDP contraction by nearly 1% in 2025, a stark shift from the rapid growth the country has enjoyed in previous decades.
The question now reverberating through Botswana’s corridors of power and corporate boardrooms is whether the country should deepen its investment in De Beers by buying a larger stake. Advocates argue that greater ownership could provide Botswana with stronger influence over the company’s strategic direction, protect its mining interests, and secure a larger share of future profits once the market stabilizes. Indeed, Botswana’s current 15% stake in De Beers and 50% interest in Debswana have been vital in channeling diamond wealth into national development. However, skeptics caution that increasing exposure to De Beers amid ongoing market volatility could amplify Botswana’s economic risks rather than mitigate them.
The debate is further complicated by the evolving nature of the diamond market. De Beers, once able to tightly control global supply and maintain high prices, now faces competition not only from other natural diamond producers but from the disruptive force of high-quality synthetic diamonds. These lab-grown stones appeal to a younger, ethically conscious consumer base and offer a cheaper alternative that has steadily gained acceptance. De Beers itself has attempted to adapt through special sales deals and stock rebalancing initiatives, but these have come at the cost of further depressing prices and eroding profit margins.
For Botswana, the imperative extends beyond the diamond sector alone. The country’s heavy reliance on diamonds has exposed it to shocks well beyond its control. The current crisis highlights the urgent need for economic diversification to reduce vulnerability to commodity price swings. While diamond revenues have fueled Botswana’s impressive social and economic progress, including investments in health, education, and infrastructure, the government must now balance short-term survival with long-term sustainability.
In this context, any decision to increase Botswana’s stake in De Beers must be weighed against broader economic strategies. Ownership could offer a seat at the table in reshaping De Beers’ future, potentially allowing Botswana to advocate for policies that protect local mining jobs and ensure more stable revenue flows. But it also risks tying the country’s fortunes even more tightly to an industry in flux. Alternatives such as strengthening partnerships with other mining companies, investing in downstream industries like diamond cutting and polishing, or accelerating diversification into sectors like tourism and technology may offer more resilient paths forward.
Anglo American’s announcement serves as a stark reminder that the diamond industry, long perceived as impervious to disruption, is undergoing a profound transformation. For Botswana, the stakes could not be higher. The country’s economic health, social stability, and future growth hinge on how it navigates this perilous moment. As diamond prices continue to fluctuate and De Beers adjusts its strategy under mounting pressure, Botswana’s leaders face a defining choice: to double down on diamonds in hopes of weathering the storm or to pivot decisively toward a more diversified and sustainable economic model.
Ultimately, the story unfolding at the crossroads of Anglo American, De Beers, and Botswana is not just about the fate of a company or a commodity. It’s about the resilience of a nation built on a single resource and the challenge of reinventing itself in a world where old certainties no longer hold. The decisions made in the coming months will shape Botswana’s economic landscape for decades to come, testing the country’s ability to adapt, innovate, and thrive beyond the glittering allure of diamonds.