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Diamonds and platinum are no longer as valuable as they once were to Anglo American. On the contrary, they have become a burden and the mining giant – increasingly in crisis – could be tempted not only to downsize its activities in these sectors, as it has already started 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. And they are destined to reignite after Anglo on Thursday 21st announced writedowns of 2.4 billion dollars, of which 1.6 billion relating to the diamond company, and the intention to subject the entire portfolio of group projects and participations.
At the end of the process, which will last about a year, “absolutely nothing is ruled out”, said CEO Duncan Wandblad, who until recently rejected any hypothesis of divestitures. “Each asset must have a role in every phase of the cycle, no one can be good only when it is at the peak (of the cycle),” he added, interviewed by Bloomberg TV.
Anglo American’s balance sheet was affected by heavy writedowns, which also affected its nickel assets in Barro Alto, Brazil, for $800 million. Profits in 2023 collapsed by 94%, to 283 million, the group announced, while operating profit (Ebitda) fell by more than 30%, to 10 billion, in line with expectations. Profitability now depends for three quarters on iron ore and copper (and operational difficulties have emerged in these areas too in recent months).
All the big mining companies, from BHP to Rio Tinto to Glencore, have felt the impact of the fall in raw material prices and many have cut their dividends: something Anglo also did, reducing them to 0.96 dollars per share (-52 %).Nickel mines are proving to be a problem for everyone: prices of the metal have halved in a year due to the enormous development of production in Indonesia, which has put most operations in the rest of the world out of business But Anglo American is further penalized by specific difficulties, largely linked to activities that distinguish it from competitors and which in the past were considered strengths.