Anglo American posts $3.7B loss on fresh De Beers writedown

[Ben Graham]

Anglo American (LON: AAL) posted a $3.7 billion loss on Friday after taking a fresh $2.3 billion writedown on De Beers, as a deepening crisis in the global diamond market continues to weigh on the miner’s bottom line.

The pre-tax impairment cut De Beers’ carrying value to $2.3 billion from more than $4 billion. Anglo has written down the unit to $6.8 billion over the past year, as weak demand and high inventories weighed on prices.

Despite the hit, underlying earnings from continuing operations rose 2% to $6.4 billion. The miner declared a dividend of $0.23 per share, about $200 million, down 27% from $0.64 per share, or roughly $800 million, a year earlier. Net debt fell to $8.6 billion.

Copper and iron ore remained Anglo’s main profit drivers and are expected to underpin earnings once its restructuring is complete.

The company is reshaping its portfolio after fending off an approach from BHP (ASX: BHP) in 2024. It revealed at the time plans to exit diamonds, coal and platinum. Since then it has struck a merger deal with Teck Resources (TSX: TECK.A TECK.B) (NYSE: TECK) to create one of the world’s largest copper miners. Shareholders of both Anglo and Teck have approved the transaction, and the companies are seeking regulatory clearance.

For now, Anglo still owns its diamond and coal businesses. The diamond sector remains under pressure and two of the company’s flagship coal mines are halted due to fires.

The Teck deal will expand Anglo’s copper footprint, adding assets including the Quebrada Blanca mine in northern Chile, near Anglo’s Collahuasi operation.

De Beers’ value review

Anglo reassessed De Beers after the unit reported a third straight annual drop in production and cut its 2026 output forecast. “There is at the moment a plentiful supply of rough diamonds in the market,” CEO Duncan Wanblad told reporters.

The sale process is at an advanced stage, Wanblad said, adding the company must secure final binding bids and select a partner in consultation with stakeholders, including the government of Botswana.

De Beers has drawn interest from multiple consortia. Botswana, which holds a 15% stake and supplies about 70% of annual rough diamond output, has signalled it wants to increase its shareholding. Angola is pursuing a 20% to 30% stake and is discussing the proposal with other African producers.

Wanblad said he is optimistic a deal will be signed this year.

Woodsmith revival?

Anglo also announced a potential partnership with Mitsubishi Corp for its Woodsmith fertilizer project in northern England, which had been placed on care and maintenance as the company prioritized copper and iron ore.

Woodsmith hosts the world’s largest known deposit of polyhalite, a naturally occurring mineral containing potassium, calcium, magnesium and sulphur, marketed as POLY4. Production to date has been limited and the market remains unproven at scale, but Anglo says polyhalite could lift crop yields by 3% to 5%.