Anglo American is reportedly in discussions to sell its 85% stake in the diamond business De Beers for around $1 billion. The potential buyer is a Global Diamond Consortium, led by former De Beers chief executive Gareth Penny, and includes Namibia, Angola, and major diamond traders. The proposed deal structure involves an upfront payment of about $750 million, with an additional $250 million paid later, supplemented by further payments based on De Beers' future business performance.
This potential sale follows Anglo American's decision in February to write down the value of De Beers by $2.3 billion. The write-down was attributed to lower forecasted diamond prices, a shift in consumer preference between natural and laboratory-grown diamonds, and an oversupply of rough diamonds relative to demand. Both spokespeople for Anglo American and Gareth Penny's consortium declined to comment on the reported discussions.
Despite the challenges in its diamond sector, Anglo American's CEO, Duncan Wanblad, has emphasized that the company's overall performance is bolstered by strong copper prices. The company is actively pursuing significant expansions in copper production, highlighted by a definitive agreement with Codelco to implement a joint mine plan for their Los Bronces and Andina copper mines in Chile. This plan is projected to unlock 2.7 million tonnes of additional copper over 21 years, averaging 120,000 tonnes annually, and is expected to generate at least $5 billion in shared pre-tax value. Additionally, Anglo American has secured the Copper Mark certification for four sites in Peru and Chile, further solidifying its position in the copper market following its rejection of a $50 billion takeover bid from BHP Group Ltd in early 2024.
