DeBeers Slashes Production Guidance As Anglo American Considers Another Goodwill Impairment

On Thursday, Leading rough diamond producer De Beers revised its guidance, slashing the anticipated production by 31% from 30 million to 20 million—23 million carats. The firm has also slashed the 2026 plan by 18% as the diamond market continues to face challenges, including weaker demand from China, cautious retail purchasing, and an oversupply of lab-grown diamonds.

De Beers noted a volatile output across the board, as Botswana's production in Q4 2024 fell by 30%, down to 4.2 million carats, owing to production reductions at the Jwaneng mine.

Canada saw a 43% decline to 500,000 carats as the company processed lower-grade ore. Namibia, however, recorded a 3% increase to 600,000 carats, thanks to higher-grade mining and improved recoveries at Namdeb.

Meanwhile, South Africa saw a 27% production boost to 600,000 carats, supported by the Venetia underground mine and better ore grades.

Despite market turmoil, De Beers recently signed a long-term agreement with the government of Botswana, the firm's most important production region.

Under new President Duma Boko, two parties finalized a deal to extend their joint venture, Debswana, until 2054. Per new terms, Botswana's share in production will gradually increase to 50%, up from the current 25%.

Boko has also indicated an interest in expanding Botswana's ownership stake in De Beers beyond the current 15%, which might depend on Anglo American's AAUKF plans.

The British multinational miner announced plans to divest from the diamond producer as part of its restructuring strategy to fend off BHP's $49 billion bid. However, deteriorating demand and falling rough diamond prices have stalled that plan, which explored both a public listing and a private sale.

The Financial Times reported that Anglo American is "assessing the impact of diamond market conditions and general fall in demand in China," which will "likely lead to an impairment at the full-year result."

Last year, the miner cut De Beers' value by $1.6 billion, reducing its book valuation to $7.6 billion. However, RBC analysts estimate De Beers' real market value to be just $2.5 billion, indicating a disconnect between internal and external valuations.

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