Anglo American Plc is expected to launch the formal sale process for its struggling De Beers diamond division within weeks, but mounting industry challenges could force the UK-based mining giant to accept 50 per cent of  the unit’s $4.9 billion book value, according to a Financial Times report.

The diamond division, once a crown jewel of Anglo American’s portfolio, may fetch as little as $2.5 billion in a sale—roughly half its current book valuation. This dramatic discount reflects the severe headwinds facing the global diamond industry, including weakening consumer demand and intensifying competition from laboratory-grown diamonds that are reshaping the luxury market.

The potential sale price represents a stunning fall from grace for De Beers, which was valued at $7.6 billion as recently as December 2023. Since then, Anglo American has been forced to write down the division’s value twice, highlighting the rapid deterioration in market conditions.

The diamond divestiture is part of Anglo American’s broader strategic transformation, accelerated after successfully fending off a takeover attempt by mining rival BHP Group last year. The failed $49 billion bid prompted Anglo American to embark on an aggressive portfolio restructuring aimed at focusing on higher-margin, growth-oriented assets.

While a direct sale remains Anglo American’s preferred strategy, the company is keeping all options open, including a potential initial public offering that could allow it to retain partial ownership while accessing public markets for capital. The flexibility suggests management recognizes the challenging sale environment and wants to maximize value regardless of the exit mechanism.

Anglo American has assembled a heavyweight advisory team including Morgan Stanley, Goldman Sachs, and Centerview Partners to navigate the complex transaction, signaling the strategic importance of achieving the best possible outcome.