CHAMWE KAIRA
It is looking likely that joint diamond ventures, including Debmarine Namibia, Namdeb land operations, and the Namibia Diamond Trading Company, all 50/50 joint ventures with the De Beers Group, will have a new partner in the near future. Anglo American, which owns De Beers, has continued its quest to sell the diamond giant.
“The work to separate De Beers is well under way, with action taken to strengthen cash flow in the near term and position De Beers for long-term success and value realisation. Given prevailing diamond market conditions, we have reduced our carrying value of De Beers by US$2.9 billion,” Duncan Wanblad, Chief Executive of Anglo American, said.
De Beers, the world’s leading diamond producer by value, has been on the market since May 2024, when Anglo announced plans to either sell the unit or launch an initial public offering (IPO).
In the year ended 31 March, production in Namibia decreased by 4% to 2.2 million carats (2023: 2.3 million carats), reflecting intentional action to lower production at Debmarine Namibia, which was down 13% year-on-year, partially offset by planned higher-grade mining and better recoveries at Namdeb.
Anglo American itself is the subject of a takeover bid by BHP Group. “We are fast transforming Anglo American into a far higher-margin and more valuable mining company focused on exceptional copper, premium iron ore and crop nutrients assets and significant growth optionality. 2024 saw us transform our performance, with strong operational and cost delivery, US$1.3 billion of costs removed on a run rate basis in 2024 with a further $0.5 billion to come by the end of 2025, and major progress with our portfolio simplification,” said Wanblad.
He said the group’s underlying EBITDA of US$8.5 billion reflects 10% lower prices and unit costs held flat, demonstrating its focus on operational stability and cost discipline to keep its EBITDA margin stable at 30% (2023: 31%).
Far stronger cash conversion enabled the company to maintain net debt flat at US$10.6 billion, equal to 1.3x underlying EBITDA.
“We are making excellent progress with our portfolio simplification. We have agreed to the sale of our steelmaking coal business for up to US$4.8 billion in gross cash proceeds and have this week agreed to the sale of our nickel business for cash consideration of up to US$500 million,” he added.
The demerger of Anglo American Platinum (AAP) is expected in June and the company intends to retain a 19.9% interest in AAP to help manage flowback post-demerger, which we expect to exit responsibly over time. All of the above will deliver a step change in our balance sheet flexibility.
“We have moved at pace to set up Anglo American as a highly attractive and differentiated value proposition for the long term, offering strong cash generation to support sustainable shareholder returns and the capabilities and longstanding relationship networks to deliver our full value and growth potential,” he said.
