Anglo American writes down De Beers on weak diamond market
The diamond market could be the next to go, with the company already offloading its coal and nickel mines.
Anglo American sign on building, 123rf.com
LONDON - Mining giant Anglo American announced Thursday a fresh write-down of De Beers as it seeks to offload the diamond group amid a wider industry downturn, notably due to weak Chinese demand.
It comes as the company is restructuring to focus on its copper and iron ore businesses while selling off other assets, after it rejected a $49 billion takeover offer from mining rival BHP.
The diamond market could be the next to go, with the company already offloading its coal and nickel mines.
"The work to separate De Beers is well underway," said Anglo American chief executive Duncan Wanblad in an earnings statement.
He added that it has reduced the valuation of De Beers by $2.9 billion, citing "prevailing diamond market conditions."
The diamond market is "very challenging," the company said, as the industry faces weak demand from China and the prevalence of cheaper lab-grown diamonds.
China is the world's biggest spender in the luxury sector, accounting for half of global sales, but consumption has flagged since its post-pandemic recovery has faltered.
The write-down largely contributed to the $3.1 billion loss in 2024 that the company announced Thursday, compared to a profit of $283 million the year prior.
It last reduced the value of De Beers in 2023 by $1.6 billion.
Anglo-American first announced last year its decision to divest from De Beers, the diamond company that long dominated the global market.
The miner on Tuesday sold off its nickel business to Chinese group MMG International.
That followed the sale of its remaining Australian coal mines for steelmaking in November to US group Peabody Energy for $3.8 billion.