Anglo’s Diamond Decline
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This article serves as the introductory analysis to the inaugural Diamond Executive Report, ‘The Value of De Beers.’ View a partial version of the report in the download below, or access the full report here.
To grasp the implications of Anglo American’s pending divestment from De Beers, it helps to understand the move in the context of its broader strategy.
In May 2024, the mining group announced plans to separate from De Beers, either through a sale or demerger. The decision followed a takeover bid from BHP Billiton and formed part of a wider restructuring designed to streamline Anglo’s portfolio, unlock value, and strengthen shareholder returns. At the center of this plan was a sharpened focus on its core businesses — iron ore and copper. That direction became even clearer in September 2025, when Anglo agreed to merge with Teck Resources, whose holdings include a major copper portfolio alongside premium iron ore and zinc assets.
The proposed divestment marks a significant turn in Anglo American’s long and layered relationship with De Beers. Anglo was founded in 1917 by Ernest Oppenheimer to develop South African mining interests, and it later became the vehicle through which he gained influence over De Beers Consolidated Mines (DBCM). It secured a majority stake in DBCM in 1926, and Oppenheimer was named chairman three years later. Over time, the Oppenheimer family built its own substantial shareholding in De Beers.
What followed was nearly a century of close entwinement, with Anglo and the Oppenheimer name becoming interchangeable with De Beers and the global diamond trade. While the family gradually reduced its holding in Anglo through the early 2000s, it retained its 40% stake in De Beers, alongside Anglo American’s 45% interest, and the Government of Botswana’s 15%.
That balance shifted in August 2012, when Anglo bought the Oppenheimer family’s 40% stake for $5.2 billion in cash, valuing De Beers at about $13 billion. The deal lifted Anglo’s shareholding to 85% and closed the chapter on one of the most iconic private holdings in modern corporate history.
Corporate Culture
That deal also marked a pivotal shift in De Beers’ corporate identity. Nicky Oppenheimer stepped down as chairman and was succeeded by then Anglo American CEO Cynthia Carroll, signaling the formal integration of De Beers’ leadership into Anglo’s executive structure. The arrangement persists today, with the De Beers chairmanship tied to the Anglo CEO position.
This transition was more than a change in personnel; it marked a cultural realignment. De Beers moved away from its legacy as a family-controlled enterprise and began to operate as a more conventional corporate entity, aligned with the governance standards and operational practices of its parent company.
That said, the process was already in motion. The 2008 financial crisis accelerated regulatory reforms, prompting De Beers to tighten internal controls and raise industry standards. Even before that, the 2003 launch of the Supplier of Choice program brought greater professional scrutiny to the selection of sightholders, raising the threshold required to secure that coveted long-term rough supply contract.
As oversight increased, sightholders were required to adopt International Financial Reporting Standards (IFRS) and adhere more rigorously to De Beers’ Best Practice Principles (BPP). These measures reinforced the company’s shift toward greater transparency and accountability, while also positioning it to guide the broader industry in the same direction. Under Anglo, adherence to these requirements became essential.
Beyond governance considerations, one of the most immediate and tangible effects of Anglo’s acquisition was financial. In its first year of Anglo majority ownership, De Beers secured a new $2 billion multi-currency credit facility on favorable terms.
Financing will again be a critical factor in any upcoming transaction, extending beyond the initial acquisition cost. A new owner will require sustained long-term funding to support De Beers’ large-scale infrastructure and operations. Anglo, as a diversified mining group with strong credit and a broad portfolio, could borrow at relatively favorable interest rates.
Whether new owners can secure comparable terms remains an open question, one that will influence how the business is managed and the scale of future investment.
Shareholders Versus Sightholders
Anglo’s stewardship marked a notable shift in market dynamics, particularly in pricing strategy. De Beers, which historically sold most of its rough through long-term contracts, continued to set prices and manage supply through internal analysis and a strict rules-based system. This contrasts with more market-driven mechanisms such as auctions or tenders, where prices are set by competitive bidding.
Under Anglo, a clear tension emerged. On one hand, Anglo preferred in weaker market conditions to hold prices steady by curbing supply. On the other, sightholders increasingly pressed for greater flexibility in pricing and volume allocations.
The strain reflected a deeper cultural realignment. Many in the trade viewed it as a break from the Oppenheimer era, when sightholder interests were more visibly championed, toward a structure more squarely oriented around Anglo shareholder value. For much of the market, this shift proved difficult to reconcile, and it continues to influence sentiment — not only among sightholders but, one suspects, within the Anglo boardroom as well.
Identity Crisis
Diamonds have long been an anomaly within the Anglo American portfolio, underscoring a question De Beers has faced since the early 2000s: is it fundamentally a mining company, or can it evolve into a luxury brand? And can it be both?
That question initially came into focus in 2001, when De Beers entered a joint venture with LVMH to establish a diamond jewelry retail business.
The objective was to combine De Beers’ pedigree in diamonds with LVMH’s expertise in luxury branding and retail, and in doing so create a high-end consumer-facing enterprise.
The first De Beers retail store opened in London in 2002. It marked a strategic departure for a company that had built extraordinary brand equity through iconic advertising campaigns yet had never sold directly to the public.
Meanwhile, De Beers came under mounting anti-trust scrutiny, centered on its exclusive agreement to market rough diamonds for Russia’s Alrosa, then the world’s second-largest producer. In 2006, the European Commission ordered a phased termination of the deal, which concluded in 2009.
The loss of Russian supply underscored a deeper structural shift. The historic De Beers model, built on centralized distribution of global rough production, was no longer sustainable or relevant. Between 2008 and 2011, in the wake of the financial crisis, the company further streamlined its portfolio, scaling back high-cost operations and exiting non-core assets.
Enduring Value
This rationalization reflected a broader philosophical pivot from volume to value. It became the lens through which De Beers interpreted both industry dynamics and consumer sentiment, particularly during the 2008 crisis.
The shift took shape in the Enduring Value campaign, launched during the downturn. With the tagline “fewer, better things,” De Beers emphasized an emerging consumer preference for quality over quantity — a single lasting purchase rather than multiple average ones.
It also marked one of De Beers’ last major efforts in generic category marketing, which the company only revived in 2024–25. By 2009, it had withdrawn from broad-based advertising, narrowing its focus following the official launch of the Forevermark brand in 2008.
De Beers had been thinking strategically about branding since the early 2000s recognizing a broader consumer shift toward engagement with brands. Noting the absence of strong diamond brands, it began urging clients to build their own retail-focused brands. Developing a related marketing program became a key criterion for gaining access to rough supply under the company’s Supplier of Choice program.
With the launch of Forevermark, De Beers introduced its own branded offering to lead the category. The goal was not only to capture value directly but also to stimulate brand-led competition across the sector — an effort designed to shift consumer demand toward diamonds as branded products, rather than a generic commoditized one.
Failed Strategy
In the years that followed, De Beers struggled to generate momentum from its retail operations.
The joint venture with LVMH failed to achieve profitability, and the fact that an outside entity held 50% of the De Beers name in retail remained a source of unease. In 2017, De Beers bought LVMH’s stake and rebranded the business as De Beers Jewellers, notably dropping “diamonds” from its name.
Meanwhile, Forevermark gained some traction in India but failed to resonate in the United States, arguably because of its wholesale model. De Beers relied on retail partners to differentiate the brand, but consumers did not naturally associate it with the De Beers name, its strongest drawcard, leaving the company with limited control over its own brand.
There was a growing sense that running two consumer-facing brands diluted De Beers’ marketing focus. In 2022, the company began integrating Forevermark and De Beers Jewellers into a single business unit to streamline its brand and retail strategy. By 2024, Forevermark had been withdrawn from the US market, remaining active only in India. The company’s retail spotlight shifted to De Beers Jewellers, which rebranded as De Beers London, aiming to channel the heritage and energy of its founding city.
Value Contribution
The broader takeaway was that, despite its branding efforts, rough diamonds remained the primary driver of revenue. At its core, De Beers was still fundamentally a mining and rough diamond business.
For Anglo American, however, diamonds proved uniquely unpredictable. Unlike other commodities in its portfolio, diamonds are not standardized. Each stone is unique, with pricing dynamics that vary across categories and respond to shifting levels of demand.
The result is a fragmented market made up of multiple pricing microcosms that are difficult to forecast.
Coincidentally or not, the diamond market grew increasingly volatile after Anglo’s 2012 buyout, reshaped by structural shifts in the industry and radical changes to consumer behavior. Demand entered a long-term decline — a slide that accelerated in the past three years, as reflected in De Beers rough price index (Figure 1).
These headwinds became evident in Anglo American’s financials. In 2016, De Beers accounted for 26% of Anglo’s total revenue. By 2024, its share had dropped to just 12%. It improved again to 19% in 2025 after Anglo discontinued its platinum, steelmaking coal, and nickel operations during the year (Figure 2).
Profitability was even more concerning. De Beers reported operating losses in 2023 and 2024, and again in 2025.
Its contribution to Anglo American’s earnings before interest and tax (EBIT) declined more sharply than its share of revenue, and the diamond unit has paid no dividends over the past three years as a result of consecutive losses (Figure 2).
These sustained losses prompted Anglo to impair De Beers’ value by $1.6 billion in late 2023, followed by a further $2.9 billion write-down a year later, and by a further $2.3 billion at the end of 2025.
The carrying value of the business dropped to just $2.3 billion — a steep fall from the $13 billion valuation in 2012, when Anglo paid $5.2 billion for the Oppenheimer family’s 40% stake. The write-downs underscored deteriorating market conditions and signaled diminishing confidence in De Beers’ long-term growth and profitability.
It was little surprise, then, when in May 2024 Anglo announced plans to divest or demerge De Beers, citing a desire to “improve strategic flexibility for both De Beers and Anglo American.”
For Anglo, shedding De Beers looks like a rational strategic move, particularly amid mounting investor pressure to simplify its structure and unlock value across its portfolio.
Whether the same holds true for De Beers remains uncertain. The shape of its next chapter ranks among the most consequential questions facing the diamond industry, given the influence the company still wields.
On the surface, Anglo’s long association with De Beers gives the impression of a formidable legacy. In reality, strategic missteps and years of stagnation have left any new owner with a modest financial base from which to build, and a business burdened by the lack of growth in an increasingly challenging diamond market.
Image: Anglo American and De Beers corporate headquarters in Johannesburg. (Anglo American)
