Anglo American’s ownership of De Beers group has faced scrutiny as the mining company announced a fresh multibillion-dollar write-down on Thursday. The valuation reduction, totaling $2.9 billion, marks the second time in two years that Anglo has reduced the value of its diamond business.
De Beers, which introduced the iconic phrase “A diamond is forever” nearly 80 years ago, has seen declining demand for diamonds due to the rise of lab-grown alternatives and a decline in the Chinese market. The company’s book value now stands at around $4 billion, down from $8.5 billion in 2023.
CEO Al Cook described the rough diamond sales as “bad” in December, citing high midstream inventory levels and depressed demand in China. Anglo expects to reduce planned production by 10 million carats this year, following a reduction of 6 million last year.
The decline in demand for authentic diamonds has led De Beers to reevaluate its strategy, including exiting the lab-grown diamond market. However, CEO Duncan Wanblad believes the headwinds can be surmounted. He notes that continued price declines for lab-grown diamonds will further separate the two markets, reducing cannibalization of genuine diamonds.
In China, retailers have started selling polished diamonds back into the midstream market to recoup losses, leading to spiked inventories in the first half of 2024. Anglo is seeking to restructure De Beers into an independent operation, potentially leading to a sale or IPO.
The company has agreed a framework with the Botswana government, which owns 15% of De Beers, to initiate a potential formal sale process after receiving unsolicited offers for the diamond company.
Source: https://fortune.com/europe/2025/02/20/chinese-retailers-offloading-polished-diamonds-demand-tanks-adding-2-billion-inventory-headache-de-beers