Anglo American may opt to float De Beers rather than sell it, because of the ongoing weak demand for natural diamonds.A spokesman for De Beers said it was working on a potential listing and a sale of the business, according to the UK’s Mail on Sunday newspaper, as “both options are very much on the table”. Sources say Anglo American is exploring an initial public offering of its diamond business De Beers with  London as the preferred venue.

Raj Ray, analyst at BMO Capital Markets, who said public markets had been challenging for diamond firms, and the near to medium-term outlook remained muted.Anglo’s CEO, Duncan Wanblad has indicated previously that it would consider a trade sale, a demerger, or an initial public offering (IPO) to maximize value for shareholders.

De Beers financials tell a story of troubled times : De Beers reported a 21% decline in total revenue from $2.8bn in H1 2023 to $2.2bn in H1 2024. The company also experienced a 22% year-on-year decrease in total rough diamond sales. Whilst the worldwide realised price remained stable, market conditions greatly affected the company’s results.  

Economic challenges in China led to low consumer confidence in the diamond market. The US is experiencing similar economic uncertainty that is preventing diamond purchases. Competition from lab-grown diamonds is also affecting De Beers’ dominance in the market, although in India, their strong economic growth has underpinned positive natural diamond jewellery growth.  

The other option is selling De Beers. The mining conglomerate has held conversations with potential buyers for the diamond unit in recent weeks, “including luxury houses and Gulf sovereign-wealth funds,” The Wall Street Journal said, citing unnamed sources. 

The situation touches on key questions many in the industry have had in the past year: Was the 2023 slump in the diamond market another cyclical downturn or the sign of a more somber future for the industry? Have lab-grown diamonds had a permanent impact on natural?  In case of a sell out the question is : who will become the new owner of this legendary company. This buyer will have to solve several non-trivial tasks that traditional diamond market players, including Anglo buyer management, have so far failed to tackle. How can new generations of consumers be made interested in natural diamonds? How can a marketing duel be won against LGD (Lab-Grown Diamonds)? What should be done about Russian sanctioned diamonds and gems? The new owner of De Beers will have to provide answers to these questions.