Former De Beers CEO said to lead race for diamond giant

A consortium led by De Beers’s former boss Gareth Penny is leading the race to buy the world’s biggest diamond miner after the Iran war hampered other bidders, according to people familiar with the matter.

Anglo American Plc is selling De Beers as part of a radical restructuring plan to fend off an approach from BHP Group in 2024. While Anglo has exited platinum mining and agreed to sell its coal operations, the diamond strategy has been complicated by one of the industry’s deepest ever crises and Botswana’s ambitions for the business.

Bidders were originally required to submit binding offers by mid-April, but Anglo has given them more time to secure financing. Yet two months later, the conflict continues to disrupt potential buyers from securing funding from the region, said people familiar who asked not to be identified as the talks are private.

There are at least three private groups still interested in buying the business, led by Penny, Australian mining veteran Michael O’Keeffe and Israeli diamond trader Nir Livnat.

Livnat, who heads diamond trader Diacore, has been struggling to finalize financing from Middle Eastern backers, including from Qatar, according to people familiar.

While the US and Iran reached an interim peace agreement on the weekend, Washington and Tehran still need to decide on the final steps and the conflict has wrought chaos across the Middle East.

Anglo has been patient so far, but it can’t wait indefinitely, some of the people said.

The status of O’Keefe’s bid is less certain, though people familiar with the process currently see him as an outsider.

Spokespeople for Anglo, Botswana and Penny declined to comment. Livnat and O’Keefe did not respond to requests for comment.

That’s left Penny in pole position. His bid, which has the backing of some of the world’s biggest diamond trading companies, is based around focusing De Beers back on the mining and marketing of natural diamonds.

Penny ran De Beers for five years, before leaving the company in 2010, when it was controlled by the Oppenheimer family. Penny led De Beers through the global financial crisis that slashed diamond prices, forcing him to idle mines and restore finances with a $1 billion rights offer.

The situation remains fluid and could change, the people said.

There remain multiple obstacles to overcome, with the biggest potentially being Botswana. The country owns 15% of De Beers and is home to its largest mines.

President Duma Boko has repeatedly said the country wants to take majority control of De Beers, a situation that would deter private investors. Still, the nation may be willing to settle for doubling its current holding, according to a person familiar with the government’s thinking.

The sales process comes as the diamond industry experiences one of the deepest and longest downturns in history. What started as a post-pandemic slump worsened amid a pullback in Chinese luxury spending and the rising popularity of synthetic stones. Trade tensions and sudden geopolitical shifts have added even more pain.

(By Thomas Biesheuvel and Loni Prinsloo)