What's Dragging Down De Beers?

This blog first appeared in the February 23 Pressing Matters Executive Memo. Read the full memo here, Pressing Matters.

Where else can we start but with De Beers’ earnings, published on Friday. The headline you’ve likely seen by now is that Anglo American wrote down the value of its diamond unit by $2.3 billion, bringing it to $2.3 billion. In the context of its ongoing effort to sell its 85% stake, that’s a damning assessment of De Beers, of Anglo’s stewardship, and of the state of the diamond market.

You can read about the earnings and the impairment by my friends Joshua Freedman at Rapaport and Rob Bates at JCKOnline.

For now, I want to highlight where De Beers is faltering. Its earnings before interest and tax, EBIT, showed a deficit of $787 million, more than double the loss in 2024 and the worst performance since at least 2012, when Anglo took majority ownership.

It’s worth understanding which of De Beers’ business units dragged down the group. Group EBIT is made up of Botswana, Namibia, South Africa, Canada, Trading and Other.

The biggest loss makers in 2025 were Other, with negative $518 million in EBIT, Trading with a $428 million loss, South Africa at negative $187 million, and Canada at negative $35 million. Botswana generated positive EBIT of $334 million, while Namibia posted a gain of $47 million.

The key number that reflects De Beers’ rough business is Trading. That’s the unit that buys rough from the production operations and sells it to sightholders, ideally at a profit. Consecutive trading losses over the past three years are a bleak reflection of the state of the rough market during that period.

But it’s also worth drawing attention to “Other,” which includes the synthetic diamond business Element Six, the brands division, and corporate. Other has posted consistent losses since Anglo began disclosing divisional EBIT in 2015, with cumulative losses totaling $4.6 billion over that period.

To my reading, that figure is largely weighed down by corporate costs that don’t generate income and by the retail arm. Its flagship retail brand, De Beers London, formerly De Beers Jewellers, ran at a loss of $178 million in 2024 and $236 million the year before, according to its latest filings with Companies House in the UK. By contrast, Element Six posted profits of $14 million and $18 million respectively in those years, based on its UK filings.

It all speaks to where De Beers’ value really lies, and what a prospective buyer might be assessing in terms of which assets to keep and which to offload. On the positive side, the EBIT breakdown underlines the importance of Botswana and perhaps explains the government’s firm stance in recent years regarding its contribution to De Beers’ bottom line.

Image: Collection of small rough diamonds (Credit: De Beers)