Two years after becoming the biggest shareholder of the firm that owns De Beers diamonds, metals tycoon Anil Agarwal announced an exit from Anglo American by divesting his near 20 percent stake. Agarwal, the founder and controlling shareholder in Indian resource giant Vedanta Resources Plc., in March 2017 paid $2.5 billion for a 12.43 percent stake in Anglo American, and then bought a second tranche in September 2017, bringing his stake in the mining group to 19.3 percent. The bonds were to mature next year but Agarwal decided to exercise a call option and take profits on his investment.
The De Beers Group recorded a 27% decline in first-half earnings to $518 million (2018: $712 million) due to the challenging midstream trading environment and slowing consumer demand growth, parent company Anglo American stated in their interim financial results. The difficult market has led to a decrease in rough diamond prices and has put pressure on the margins of those in the trading business, the company said.
De Beers decreased its rough diamond production in Q2 by 14% to 7.7 million carats and revised its full-year guidance downwards to ~31 million carats in response to a backlog of polished diamond inventories in the midstream and weaker trading conditions. The overall decline was mainly driven by reductions in Botswana (Debswana) and South Africa (DBCM). The miner's H1 production fell by 11% to 15.5 million carats from 17.5 million carats during the same period a year ago.
Botswana’s GDP per person is one of the top three in Africa and it’s off the back of diamond mining. There is no commodity in the world that means as much to a group of people in terms of lifting them out of poverty than diamonds in Botswana. In terms of revenue and the benefits to the people of Botswana, it can’t be understated. From the President to people living on the ground, they understand the importance of diamonds and the contribution to society.
- Anglo American CEO Mark Cutifani, on the social benefit of diamond mining
De Beers' parent company Anglo American has announced a slight rise in its guidance for diamond output this year to 35-36 million carats (previously 34-36 million carats), marking a rise from the 33.5 million carats recovered in 2017. They estimate a reduction in 2019 volumes down to 31-33 million carats due to declining open pit production at the Venetia mine in South Africa as it transitions underground, and the Victor mine in Canada reaching its end-of-mine-life.
Debswana, the joint venture between the Botswana government and Anglo American’s De Beers unit, intends to expand its Jwaneng Mine extending its lifespan by eleven years, to 2035, to extract an additional 50 million carats.
The De Beers Group today announced its annual results for 2017, showing high volumes of production and sales offset by a lower value mix of goods, leading to a 4% reduction in total revenue to $5.8 billion from $6.1 billion 2016.
De Beers Group and parent company Anglo American announced rough diamond production for Q4 2017 increased five percent to 8.1 million carats from 7.7 million carats, bringing their annual production to 33.4 million carats, a 22% increase over 2016 (27.3m ct). They say the fourth-quarter rise reflects stronger trading conditions as well as the contribution from the ramp-up of Gahcho Kué in Canada, where production doubled to 993,000 carats due to the ramp-up of the mine, which reached nameplate capacity in Q2 2017. Q3 production, however, was notably higher at 9.2 million carats.
Anglo American’s De Beers’ rough diamond sales for the 9th cycle saw a 21% increase from the previous cycle, which CEO Bruce Cleaver says is due to “an uptick in demand from our customers as retail orders increase ahead of the Christmas season.”
According to yesterday’s media release, De Beers’ rough diamond 7th sales cycle fell by 12% to $505 million, from July’s $576 million. This represents a 21% decrease over rough diamond sales valued at $539 million at Sight 7 a year ago. For the first six cycles of the year to date, De Beers' rough diamond sales are valued at $3.50 billion, a 1.5% decline compared to the $3.56 billion sold during the first six cycles of 2016.
The Botswana Government, through the Ministry of Investment, Trade and Industry, today signed a Memorandum of Understanding (MoU) with Anglo American, Debswana and De Beers Global Sightholder Sales to underpin the continued expansion of the Tokafala Enterprise Development program, according to a De Beers Group press release. The partnership to implement a 3-year program builds on Anglo American’s extensive experience and successes in enterprise development, tailored to the specific Botswana context.
De Beers rough diamond sales at Sight 6 (Global Sightholder Sales and Auction Sales, July 24-28) provisionally totalled $572 million, according to today's media release. This represents an 8% increase over rough diamond sales valued at $528 million at Sight 6 2016, and a nearly 6% increase over the latest sales Cycle 5 (June 12-16, 2017). For the first six cycles of the year to date, De Beers' rough diamond sales are valued at $3.50 billion, a 1.5% decline compared to the $3.56 billion sold during the first six cycles of 2016.
De Beers' rough diamond production for Q2 2017 increased 36 per cent to 8.7 million carats, which is in line with the higher production forecast for 2017 and reflects stable trading conditions as well as the contribution from the ramp-up of Gahcho Kué in Canada to nameplate capacity, report De Beers/Anglo American in a press statement. Second quarter production in Canada increased almost six-fold to over 1.0 million carats from 147,000 carats, with a total of 831,000 carats from Gahcho Kué (51% share) and 182,000 carats from their Victor mine.
Anglo American plans to redevelop the historical premises of its De Beers diamond unit after choosing the building as its preferred option for a new London headquarters, write Jack Sidders and Thomas Biesheuvel for Bloomberg. Citing people with knowledge of the plan, they write that AA intends to modernize the Charterhouse Street property and then transfer staff there from its current premises near Buckingham Palace. The decision is subject to Anglo winning planning and regulatory approvals for the project, two of the people said.
The South African government has raised the minimum threshold for black ownership of mining companies to 30 percent in a surprise move that weakened the rand and knocked shares in the London-quoted mining groups Anglo American and Petra Diamonds. Shares in Anglo American have fallen sharply after South Africa announced changes to its mining regulations. They dropped 57p, or more than 5 percent to £10 after South Africa’s mineral resources minister Mosebenzi Zwane said miners have to raise their black-owned stakes to 30% from 26% under a revised version of its mining charter.
Diversified miner and 85% owner of De Beers, Anglo American, has appointed Stuart Chambers to succeed John Parker as the miner's next chairman and carry on with its overhaul, the company announced in a press release. Mr. Chambers does not bring mining experience to Anglo; rather he was Chairman of UK-based IT and IP (intellectual property) firm ARM Holdings and of multinational consumer packaging company Rexam plc (now Ball Corporation) until 2016.
The Diamond Producers Association (DPA) announced their intention to spur demand in the third largest diamond market, India, by launching their “Real is Rare” slogan in September. The DPA - an international alliance of the world’s leading diamond mining companies whose mission is to protect and promote the integrity and reputation of diamonds, and the diamond industry - initially launched its “Real is Rare” campaign in the U.S. in 2016.
Diversified miner Anglo American has released its Q1 2017 production report, announcing De Beers rough diamond production during the peariod increased by eight per cent over Q1 2016 to 7.4 million carats, "reflecting the contribution of Gahcho Kué in Canada, as well as increases in response to improved trading conditions." Q1 2017 production fell slightly from 7.8 million carats produced in Q4 2016.
Anglo American Plc’s billionaire shareholder, Anil Agarwal, said he had no intention of behaving like an activist investor following his $2.5 billion investment for a 13% stake earlier this month. He continued by staying he had no plan to buy Anglo’s assets in South Africa, or to push for a seat on the board. The investment was made through Agarwal’s holding company, Volcan Investments, rather than Vedanta Resources.
Diamond industry analyst and author of the Zimnisky Global Rough Diamond Price Index, Paul Zimnisky, takes us on, "A Trip Through the Diamond Industry in March 2017." If there is one trip you make this weekend, we recommend this one.
Anglo American and De Beers' 2016 Annual Financial Results (preliminary) confirm a solid rebound from 2015 for the rough diamond giant, with annual revenues increasing 30% to $6.1 billion from $4.7 billion, on the back of a 37% rise in rough diamond sales, which reached $5.6 billion.
Anglo American, the London-based diversified mining conglomerate including the De Beers Group in its portfolio, has announced that Sir John Parker intends to step down, after serving eight years as Chairman, during the course of 2017. Sir John Parker, Chairman of Anglo American, said: "Having seen Anglo American emerge in a strong position from the mining industry downturn, with its sharp falls in commodity prices between 2014 and 2016, I believe that the time is now right for the Board to seek my successor during the course of 2017.
As in previous years, De Beers has allocated $35 million to diamond explorations and, in an effort to improve the rate of discoveries, will be implementing new technology. Mining companies have cut exploratory spending due to the 2015 slump in commodity prices, as well as the widening gap between expenditure and the value of resources found, as the best quality ores are reportedly depleted. "Our exploration spend this year is likely to be in line with last year's, around $35 million,” said De Beers.
De Beers and Anglo American report that rough diamond production for Q4 2016 increased by 10 percent to 7.8 million carats compared with Q4 2015 (7.1 Mct) when production was reduced in response to trading conditions. The company highlights that the increase reflected the ramp-up of Gahcho Kué Mine in Canada, the joint venture between De Beers (51%), which is also the operator, and Mountain Province Diamonds. Rough production surged 24% from Q3 2016 (6.3 million carats) to Q4 2016 (7.8 Mct).
Diamond traders from all around the world are on their way to Botswana for one of the biggest annual sales as the $14 billion industry attempts to recover from India’s demonetization. India processes as much as 90% of the worlds rough diamonds with the purpose of being cut, polished or traded, but the steady supply of diamonds for its manufacturing industry has come under pressure as a result of the currency crisis.
Anglo American has published an update on its production performance for the third quarter of 2016, indicating that diamond production for the third quarter of 2016 increased by four percent to 6.3 million carats compared with the third quarter of 2015, when production was reduced to 6.0 million carats in response to weaker trading conditions.
Mining giant Anglo American, which owns 85 percent of De Beers, has narrowed its half-year loss as it pushes to keep cutting costs in response to “sharply” lower commodity prices. The global miner reported a loss attributable to shareholders of $813 million in the six months to June 30, compared with a loss of $3.02 billion in the corresponding period a year earlier. The firm has been battered this year by plunging commodity prices.
According to an article by mining.com, Anglo American's (AA) largest shareholder, South Africa's Public Investment Corporation (PIC), would prefer to downsize the company even further than was accomplished with AA's "radical portfolio restructuring" at the end of last year. The world's number five diversified mining company said it would cut around 85,000 employees and announced plans to reduce the number of mines it operates from 55 to as few as 16 to focus on diamonds, copper and platinum because of better long-term potential.
Anglo American has announced the commissioning of De Beers' (51%) and Mountain Province Diamonds' (49%) Gahcho Kué diamond mine in the Northwest Territories of Canada. Gahcho Kué - the world's largest new diamond mine - is expected to reach full commercial production in Q1 2017, producing an average of 4.5 million carats per year over its anticipated 13-year life.
According to a press release from Anglo American, De Beers' underlying EBIT (earnings before interest and taxes) for the first half of 2016 increased by 2% to $585 million (H1 2015: $576 million). "This was the result of higher revenues from stronger rough diamond demand, tight operating cost control and favorable exchange rates," reads the statement. Consolidated unit costs declined from $82/carat to $65/carat as a result of cost-saving programs and portfolio changes, supported by favorable exchange rate movements.
Anglo American Plc, which owns 85 percent of De Beers and is desperately trying to turn around its debt-laden business in the face of a commodity price collapse, reported that its first-half profits plunged 23 percent. Its net debt declined, but was still huge at $11.7 billion compared with $12.9 billion at the end of last year.
Anglo American published an update on its production performance for the second quarter of 2016, reporting that De Beers' diamond production for the period decreased by 19 percent to 6.4 million carats from the 8 million carats mined in Q2 a year ago, and 7.2% compared to Q1 2016. The decline reflects the decision to reduce production in response to prevailing trading conditions in the second half of 2015 and was intended to rebalance supply and demand.
Discoveries of diamonds on land along Namibia's coastline in the southern Atlantic may extend ground-based mining operations by another 50 years, said the country's Finance Minister, Calle Schlettwein. Namibia is the world’s largest producer of marine gems. Namdeb Diamond Corp., jointly owned by the Namibian government and De Beers, came across diamond deposits after pushing back the sea wall at its land-based operations, Schlettwein told Bloomberg.
Indian mines secretary Balvinder Kumar has stated that India is seeking the participation of Rio Tinto and Anglo American's De Beers to explore for diamonds and gold, reports Reuters, a move it refers to as part of Prime Minister Narendra Modi's ambition to make the country a major mineral producer. Kumar said that the Indian government will start to auction the rights to up to 70 diamond and gold exploration zones to mining companies this year.
Koin International will be selling original rough production from five African countries, including diamonds from Mothete in Lesotho, full original run of mine production from the Krone-Endora mine in South Africa, large single stones from the alluvial Namakwa North West mine in South Africa, more than 36,000 carats of original 'First to Market' Angola production sorted by Koin International, original tailings from the Klipspringer mine in South Africa, and original production directly from Sierra Leone and the Democratic Republic of Congo. The tender will run from June 20 to 23 in Antwerp.
After posting a $5.6 billion loss for 2015 as a global rout in commodity prices punished the costly mines it operates around the world, mining giant Anglo American (AA) entered a drastic restructuring phase intended to reduce its total number of mining operations from 45 to 16, but it is holding onto De Beers.
In February, ratings agency Moody's downgraded Anglo American's (AA) debt to junk status with a negative outlook on the London-listed company's credit rating.
De Beers, the world’s largest diamond company, is to leave its London headquarters after almost a century, as parent company Anglo American trims costs, reports Bloomberg. About 300 staff were told on Friday that they would be leaving 17 Charterhouse Street, from where De Beers once controlled the flow of diamonds around the world. Charterhouse Street became the centre of De Beers’ empire – and therefore the global diamond trade – in the early 1930s. The building no longer holds the company sights, which moved to Botswana in November 2013.