On Friday, Anglo American plc (OTCQX:AAUKF) posted a $3.7 billion loss after booking a $2.3 billion writedown on its De Beers diamonds business. The crisis of the global diamond industry arrived at a volatile period for the firm, as it restructured and negotiated a merger of equals with Teck Resources Ltd. (NYSE:TECK).
The latest impairment at De Beers brought total writedowns to $6.8 billion over the past year. Despite 2% higher earnings from operations, the non-cash charge pushed the group into the red and forced a reset of shareholder returns.
Anglo declared a dividend of 23 cents per share, roughly $200 million, down 64% from 64 cents per share, or about $800 million, a year earlier. The cut reflects both weaker diamond prices and management's desire to preserve balance sheet strength as it reshapes the portfolio. Net debt fell to $8.6 billion, but the dividend reduction highlights how severely De Beers has weighed on group performance.
Losing Luster
Anglo has struggled with the diamond business ever since it accelerated a strategic overhaul after fending off a $49 billion takeover bid from BHP Group Ltd. (NYSE:BHP) nearly two years ago. The miner sought to simplify its structure and focus on copper and iron ore, announcing plans to exit diamonds, coal, and platinum.
As part of that pivot, Anglo agreed to a transformative merger with Teck to create one of the world's largest copper producers. Shareholders have approved the deal, and regulatory clearances are being sought, with completion targeted once final approvals are secured.
The proposed Anglo-Teck combination would cement the group's shift toward future-facing commodities. Headquartered in Vancouver, the enlarged company would bring together major copper assets, including Teck's Quebrada Blanca operation in Chile and Anglo's portfolio.
Regional Ownership
The former portfolio crown jewel, De Beers, remains on the books but under intense pressure. Production has fallen for three consecutive years, and the company has cut its 2026 output forecast.
"There is at the moment a plentiful supply of rough diamonds in the market," chief executive Duncan Wanblad said, according to Reuters. He noted the market was swamped by inventory and weakened by slowing luxury demand and the rapid rise of lab-grown stones.
Anglo has put De Beers up for sale and says the process is at an advanced stage, with final binding bids expected this year. Botswana, which owns 15% of De Beers and supplies about 70% of its rough diamonds, has signaled it wants to increase its stake. Angola is also seeking a significant position.
"Taking the majority stake within luxury commodities is very dangerous because it depends on the market," Paulo Tanganha, Angola's national director of mineral resources, told Reuters. "So to de-risk that, we have to have a portion that is sustainable for our economy. And that range (is) between 20% and 30%, we are happy about that."
He added that Angola and neighboring producers were holding closed-door talks to find a common position.
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