Anglo American anticipates impairment for De Beers amid weak diamond demand

AngloAmerican expects to book an impairment this year for its De Beers diamond business due to weak market conditions. This announcement comes as the company moves forward with plans to either spin off or sell its diamond business, a key part of the major restructuring programme it initiated last year in response to a tentative £39bn ($48.56bn) takeover bid from rival BHP, reports the Financial Times.

The company stated that it is undertaking an “impairment review” to evaluate the value of the diamond business. The group said it was “assessing the impact of diamond market conditions and general fall in demand in China” and this was “likely to lead to an impairment at the full year result”, which will be published on 20 February.

While the company did not specify the potential size of the write-down, the news is expected to raise concerns among shareholders that Anglo may be at risk of selling its diamond business at a low market value.

Last year, Anglo American reduced the diamond business’ book value by $1.6bn to $7.6bn.