Anglo has said it’s willing to wait for a recovery in the diamond market before exiting. Picture: Simon Dawson/Bloomberg
Anglo American Plc said it’s weighing further cuts to diamond production as the industry is hamstrung by weak Chinese demand and too much supply.
The mining behemoth, which intends to sell or spin off its De Beers diamond business, has seen the unit suffer from a slump in prices for the gems. Poor consumption in the crucial Chinese market has added to pressures from lab-grown stones and inflation-hit consumers around the world.
“The diamond market remains challenging as the midstream continues to hold higher-than-normal levels of inventory,” Anglo said Thursday. “As a result and together with our partners, we will continue to assess the options to reduce production going forward.”
The company announced plans to exit De Beers earlier this year as part of a successful rebuttal of a $49 billion approach from BHP Group, the world’s biggest miner.
Anglo has said it’s willing to wait for a recovery in the diamond market before exiting, believing De Beers should command a price that reflects its status as a trophy asset.
The company also said Thursday that fire damage at its Grosvenor coal mine in Australia appears to be limited. The site is among a suite of coal assets it’s in the process of selling. Anglo plans to announce a sale in the coming months.
BUSINESS REPORT