Anglo American's stock declined 0.42% to 3,531 pence in early London trading on Tuesday, partially reversing gains from the previous session. The movement follows emerging details about the potential sale of its diamond subsidiary, De Beers, which is becoming increasingly complex due to multiple government interests.
De Beers Sale Attracts Government Attention
Angola is reportedly pursuing a 20% to 30% ownership position in De Beers as part of ongoing discussions, according to a senior official from the nation's mining ministry. The talks also involve other African diamond-producing nations, including Botswana and Namibia, though a unified agreement has not yet been reached. Anglo American CEO Duncan Wanblad has indicated he anticipates De Beers will be sold to a public-private consortium, with a deal expected within the year.
Market and Sector Pressures
The broader diamond market continues to face significant headwinds. Demand for natural stones remains subdued, while competition from lab-grown alternatives is intensifying, eroding pricing power for traditional miners. This challenging environment is a key factor for investors assessing the valuation and timing of Anglo's potential exit from De Beers.
Anglo American's full-year financial results, scheduled for release on February 20, are the next major focal point for the market. Analysts will scrutinize the performance of the diamond segment and any updates on the divestment strategy. The company's plan to streamline its portfolio and recycle capital hinges on a successful transaction.
Risks to the sale process include the potential for disagreements between state-backed entities and private investors on valuation and governance, which could delay the deal. Furthermore, a prolonged recovery in diamond demand would adversely impact the unit's profitability and final sale price.