De Beers' diamonds are now a ballast for Anglo's accounts: divestment in sight?
The mining group's balance sheet sunk by $2.6 billion in write-downs, more than half of which was for the historic subsidiary. Anglo American also fears a structural crisis in the platinum sector and launches a portfolio review
3' min read
3' min read
Diamonds and platinum are no longer as valuable to Anglo American as they once were. On the contrary, they have become a ball and chain and the mining giant - increasingly in crisis - may be tempted not only to downsize its activities in these areas, as it has already begun to do, but perhaps even to get rid of them.
Speculation about a possible sale of De Beers in particular has been circulating for some time now. And they are bound to flare up again after Anglo on Thursday 21 announced write-downs of $2.4 billion, of which $1.6 billion related to the diamond company, and the intention to subject the group's entire portfolio of projects and holdings to a thorough 'review'.
At the end of the process, which will take about a year, "absolutely nothing is ruled out," said CEO Duncan Wandblad, who until recently dismissed any suggestion of divestments. "Each asset has to play a role at each stage of the cycle, no one can be good only when you are at the peak (of the cycle)," he added, interviewed by Bloomberg TV.
Anglo American's balance sheet was affected by heavy write-downs of USD 800 million, which also affected its nickel assets in Barro Alto, Brazil. Profits in 2023 plummeted by 94% to USD 283 million, the group reported, while operating profit (EBITDA) fell by more than 30% to USD 10 billion, in line with expectations. Profitability is now three-quarters dependent on iron ore and copper (and operational difficulties have also emerged in these areas in recent months).
All the mining biggies, from Bhp to Rio Tinto to Glencore, have felt the impact of falling commodity prices and many have cut their dividends: which Anglo has also done, reducing them to $0.96 per share (-52%).Nickel mines are proving to be a problem for everyone: the metal's price has halved in a year due to the huge growth in production in Indonesia, which has put most operations in the rest of the world out of business.But Anglo American is further penalised by specific difficulties, largely related to activities that distinguish it from its competitors and that were once considered strengths.
