Anglo American expects to record an impairment for its De Beers diamond business this year, citing weak market conditions.
This announcement comes as the company moves ahead with plans to either spin off or sell its diamond business, a central element of the restructuring program it launched last year. This restructuring followed a potential £39bn ($48.56bn) takeover offer from rival BHP.
The company said it is conducting an “impairment review” to assess the value of the diamond business.
Anglo American noted that it is “assessing the impact of diamond market conditions and the general decline in demand from China,” which it expects to result in an impairment by the end of the year. The company will release its full-year results on February 20.
While the company did not specify the size of the potential writedown, the news may raise concerns among shareholders that the diamond business could be sold at a lower market value, according to the Financial Times.
Last year, Anglo American reduced the value of the diamond business by $1.6bn, bringing its book value down to $7.6bn. De Beers’ rough diamond production dropped by 26% to 5.8 million carats in the fourth quarter of 2024, compared to 7.9 million carats during the same period in 2023.
For the full year, total production fell by 22%, from 31.86 million carats in 2023 to 24.7 million carats in 2024.
The company has adjusted its 2025 production forecast to 20–23 million carats, down from the previous estimate of 30–33 million carats. Anglo American also expects a small loss for its diamond business.
Earlier this week, CEO Duncan Wanblad confirmed that the company plans to exit De Beers by the end of 2025.
Anglo American owns 85% of De Beers, with the Government of Botswana holding the remaining 15%.
The global diamond market has been facing challenges, including an oversupply of lab-grown diamonds, which are priced at just one-twentieth of mined diamonds. Additionally, demand has struggled to recover since the Covid-19 pandemic.
Production figures released on Thursday showed that the average selling price of De Beers diamonds dropped by 20% in 2024 compared to the previous year.
Currently, the company’s diamond inventory is valued at approximately $2bn, and Anglo is working to reduce it.
Wanblad explained, “At De Beers, difficult rough diamond trading conditions have led us to reduce production guidance for 2025 and 2026, focusing on value, working capital efficiency, and cash generation.”
In other news, the company produced 773,000 tonnes of copper in 2024, within its guidance range of 730,000–790,000 tonnes. The Quellaveco mine in Peru achieved its strongest quarterly performance of the year in Q4.
Anglo American also reported a new record at its Minas-Rio iron ore operation in Brazil, which produced 25 million tonnes in 2024, helping push the company’s total iron ore production to 60.8 million tonnes for the year.
Wanblad added, “Our forward production guidance for copper remains unchanged, with growth in 2026 expected from higher grades in Chile. We continue to set up the copper business for future growth, with plans for the smaller plant at Los Bronces and debottlenecking at Collahuasi. Iron ore guidance remains unchanged, aside from the impact of the UHDMS project at Kumba in 2026.”
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