Anglo American is hoping for a slow recovery in rough diamond sales

A 30-carat rough diamond is viewed at the offices of a polishing factory in Antwerp, Belgium. Photo: AFP

A 30-carat rough diamond is viewed at the offices of a polishing factory in Antwerp, Belgium. Photo: AFP

Published Jun 27, 2024


ANGLO American believes there will be a protracted U-shaped recovery in demand for its right diamond after its provisional 5th cycle sales of $315 million (R5.7 billion) was more than 30% below the $456m sold in the 5th cycle last year.

The provisional 5th cycle sales figure for De Beers at the Global Sightholder Sales and Auctions was also 17.8% below the $383m of rough diamonds sold during the 4th cycle in 2024.

“The northern summer is generally a quieter period for rough diamond sales, and this was reflected in our cycle 5 sales,” De Beers CEO Al Cook said in a statement yesterday.

He said the recent annual JCK jewellery show in Las Vegas had confirmed a resurgence in retailers’ interest in natural diamonds in the US, but economic growth challenges in China meant the group continued to expect a “protracted U-shaped recovery in demand”. The JCK jewellery shows bills itself as the jewellery trade’s most important global event.

The Cycle 5 2024 provisional sales figure value represented sales as at June 25. Cycle 4 2024 actual sales value represented sales between April 18 and May 22.

According to the Financial Times’ online service, Anglo American had to write down $2.4bn in its diamond and nickel businesses for the year to December 31, 2024, as the gemstone market took longer to recover and there was an oversupply of the battery due to supply from Indonesia.

A $1.6bn impairment charge was booked on its De Beers diamond division, while there was a $800m write-down for its Barro Alto nickel mine in Brazil after the metal’s price tumbled from record highs in 2022.

Lower prices for Anglo America’s key mined commodities led to a 31% decline in Anglo’s underlying earnings before interest, tax, depreciation and amortisation to $10bn in 2023 over the previous year. The dividend was also cut to $0.96 per share to reach $1.2bn in total for 2023 – a 52% fall over the year.

Anglo America’s share price closed xxx% higher at XXX yesterday on the JSE, well up from R537.14 a year ago.