Tag: De Beers

Anglo American, the $30.7 billion British multinational mining company, just announced plans to divest De Beers, its diamond mining and jewelry subsidiary. Ango American holds an 85% interest in De Beers and the government of Botswana owns the minority share.

“Anglo American is now exploring the full range of options to separate the business in order to set it up for success in unlocking full value, “ Anglo American CEO Duncan Wanblad said in a presentation earlier this week. “This will give both Anglo American and De Beers a new level of strategic flexibility to maximize value for both company’s shareholders.”

Anglo American is fighting a takeover bid from BHP Group, reported by Reuters to be the world’s largest mining company. In a move to shore up the company’s overall value, Anglo American will focus on its cooper, premium iron ore and crop nutrients businesses. Also slated to be divested is its Anglo American Platinum business, both of which will bring profound changes to the roughly $300 billion global jewelry industry.

Advising that Anglo American is considering a number of options for De Beers, be it a sale or IPO, and that it is still working through logistics with Botswana, Wanblad said, “It is a great business and it has fantastic assets and it has an exceptional brands. And therefore on that basis, it really deserves to be together on that set of criteria. How we do this is going to be a journey.”

De Beers CEO Al Cook is more than ready for the next phase of that journey. “For 124 of our 136 years of existence, Anglo American didn’t own the majority of De Beers,” he shared in an exclusive interview from Botswana. Anglo American acquired its majority stake in 2011.

Source: Forbes

As part of efforts to provide increased provenance across the diamond industry, De Beers plans to bring the first non-De Beers Group goods onto its Tracr platform this year.

The Tracr platform uses blockchain, AI, the Internet of Things and advanced security and privacy technology to track a diamond’s journey from where it is mined and throughout the value chain, providing consumers tamper-proof assurance of where the diamond comes from.

“Our leadership in diamond transparency and traceability continued throughout 2023, underpinned by leading technologies, so that we can increasingly connect consumers with the provenance of their natural diamond and all the benefits it has delivered along its journey,” De Beers CEO Al Cook says in an update to shareholders on the group’s ‘Building Forever’ sustainability goals.

In its ‘Building Forever 2023 Sustainability Report’, published on May 8, De Beers reflects on the sustainability goals it has achieved.

This includes having engaged 5 000 women and girls in science, technology, engineering and mathematics – two years ahead of schedule.

Further, De Beers has agreed to establish a flagship Diamonds for Development Fund, in Botswana; progress key renewable energy projects in support of its emission reduction targets; and scale the development of Tracr.

De Beers reports that it is now registering more than two-thirds of its global production by value on the platform, with 1.5-million individual diamonds registered on the platform during 2023, bringing the total registered on Tracr to two million.

De Beers also opened up the platform to the wider industry, with a number of prominent marketplaces and laboratories, including the Gemological Institute of America and Gemological Science International having joined the platform.

Further, De Beers announced a collaboration with diamond traceability technology company Sarine to focus on recording technologically assured, rough-to-polished diamond traceability, without the need for further physical verification, the diamond miner notes in its sustainability report.

“Tracr and Sarine technology is open to users across the industry and will focus on making digital access to information on diamonds available to Group of 7 officials,” the report states.

In addition, De Beers also launched a “substantially uplifted” Pipeline Integrity (PI) standard, that includes higher expectations and a new melee supplement. The PI standard sets the key criteria for demonstrating segregation and traceability of eligible diamonds from non-eligible diamonds.

“It assesses each entity in the chain of custody, from the point of rough purchase through to the polished sorting office, to help ensure the management systems, policies and procedures are in place to segregate and reconcile eligible diamonds from non-eligible diamonds,” De Beers explains.

In 2023, the group expanded the scope of participants in the PI programme to Tracr participants involved in the handling or the manufacturing process who register polished eligible diamonds on the platform.

This expansion in scope resulted in a 16% increase in the number of entities required to participate in PI, compared with 2022.

Each entity participating in the PI programme must conduct an annual self-assessment and undergo a third-party assessment by SGS – De Beers’ chosen external verifier.

Meanwhile, De Beers is also progressing renewable-energy projects at its operations as part of its emissions reduction efforts.

“We continue our efforts to reduce our carbon footprint in line with our recently validated science-based emission reduction targets and are progressing investments in renewable energy to power our operations,” Cook says.

De Beers has entered into an agreement with Envusa Energy – a joint venture between its parent company Anglo American and EDF Renewables – to wheel 48 MW of wind and solar generated electricity to the Venetia mine, in Limpopo, South Africa, from 2025.

The diamond miner has also completed a prefeasibility study into a 50 MW on-site solar plant to be built at Venetia. A feasibility study into the project is under way and expected to be completed by mid-2025.

Further, De Beers has progressed plans for the development of a 34 MW wind farm at subsidiary Namdeb’s land-based operations, in Namibia. A feasibility study is under way.

In Botswana, Debswana is exploring renewable energy supply options to be developed in partnership with the Botswana Power Corporation or independent power producers.

It also held an inaugural Scope 3 supplier summit, mandating carbon reporting for the company’s sightholders and securing commitments with key suppliers to work on aligned greenhouse gas (GHG) reduction roadmaps.

De Beers has set a target of achieving a 42% decrease in its absolute Scope 1 and Scope 2 GHG emissions, as well as a 25% decrease in its absolute Scope 3 GHG emissions by 2030, with 2021 set as the baseline year.

Source: Miningweekly

Diamond output for De Beers slumped 23 per cent in the first quarter, as production was cut in response to a slow recovery in demand amid a pullback in luxury spending and the proliferation of lab-grown equivalents.

De Beers was the only unit of Anglo American to adjust its full-year production forecast on Tuesday, reducing its guided range to 26mn to 29mn carats of output, from 29mn to 32mn, and lifting expected average costs to $90 per carat, from $80.

Anglo American said the diamond market was suffering from a price rout caused by excess piles of inventory, something that De Beers has previously acknowledged is partly down to lab-grown diamonds cannibalising demand for mined stones.

“Ongoing uncertainty around economic growth prospects has led to a continued cautious purchasing approach” by its customers, Anglo American said. “The recovery in rough diamond demand is expected to be gradual through the rest of the year,” it added.

De Beers said a nascent recovery had begun in the first quarter, buoyed by improved demand for diamond jewellery around Christmas and new year in the US.

Diamond producers including De Beers’ arch-rival, Russia’s Alrosa, tried to curb the flow of gemstones into the market in the second half of last year. The Indian government even put on a voluntary import moratorium on rough stones in the final quarter to protect its polishers and cutters.

Despite those continued efforts into this year, demand, prices and the market recovery remains sluggish, Anglo said, requiring further action to be taken to reduce supply.

Anglo American chief executive Duncan Wanblad has been under pressure to improve performance since a production downgrade in December sent shares tumbling, although it has been aided by higher commodity prices, especially for copper.

Wanblad has said that “nothing is off the table” when it comes to asset sales or other options to restructure units, of which De Beers and the platinum group metals division are the most troubled.

“We are progressing through our asset review to optimise value by simplifying and improving the overall quality of the portfolio,” he said in a statement in the first-quarter production update on Tuesday.

Shares in Anglo American dropped 1.7 per cent in early trading in London and remain about a third lower than they were at the start of 2023.

Besides diamonds, the London-based company managed to maintain its guidance across its other commodities such as copper, iron ore and steelmaking coal.

Copper output jumped 11 per cent to 198,100 tonnes, helped by record throughput at its Quellaveco mine in Peru and higher grades at its Chilean mines Collahuasi and El Soldado.

South Africa, where Anglo American has iron ore, steelmaking coal and platinum mines, has become an increasing drag on production because of crippling problems in the logistics and power sector. Rail constraints resulted in a 2 per cent drop in output at Kumba Iron Ore.

Source: ft.com