De Beers Gets a $2.9 Billion Writedown

Diamonds are the hardest known substance, but the diamond-mining market is looking more fragile than ever. 

On Thursday, mining giant Anglo American announced a $3.1 billion loss in its full-year results for 2024, and marked down the value of its diamond unit De Beers, which it has been trying to offload, by $2.9 billion. It notched a $1.6 billion writedown of the unit last year, so this year’s markdown is 81% bigger.

Cut-Price Diamonds

De Beers, one of the largest and most iconic companies in the diamond mining sector, has been battered by market forces that have left the industry as a whole pretty frazzled. The ascendance of cheaper lab-grown gems has eaten into mined gems’ market share, demand died off dramatically post-lockdown (when consumers were more likely to throw caution to the wind for a shiny stone), and Russian sanctions threw off the supply chain.

For Anglo American, which spent last year fending off a takeover by rival BHP and has promised a major restructuring, De Beers makes sense to jettison. Exactly how, though, is a multi-faceted question:

• Anglo American has considered both selling De Beers outright and spinning it out via an IPO. Earlier this month, the IPO route was looking more likely after the government of Botswana expressed an interest in acquiring a bigger stake in the company (it currently owns 15% compared with Anglo American’s 85%).
• De Beers CEO Duncan Wanblad said Thursday that Botswana hasn’t yet decided how big an extra chunk it might take, and that agreeing on licenses with the country’s government had slowed its ability to field “unsolicited inbounds” for the company, per the Financial Times.

Diamonds Cache Value: Wanblad also said that a portion of the company’s current valuation of De Beers rests on a $2 billion stockpile of gems. The retail price of natural diamonds has decreased 26% since peaking in 2022, per a January report from The Guardian, so who knows just how precious that stockpile will remain.