Anglo American hit by De Beers writedown, posts $3.7 billion loss

By Clara Denina

LONDON, Feb 20 (Reuters) - Anglo American AAL.L posted a $3.7 billion loss on Friday after taking another writedown on its diamonds business, as the miner pushes ahead with plans to shed non-core assets and complete its merger with Teck Resources TECKb.TO.

Anglo wrapped up a mixed reporting season for London-listed mining groups, underscoring the industry's diverging fortunes as Antofagasta ANTO.L benefited from soaring copper prices while diversified peers struggled with weaker iron ore, diamond and coal markets.

The company booked a $2.3 billion pre-tax impairment tied to its De Beers unit, reducing the carrying value to $2.3 billion from more than $4 billion previously.

Core earnings, or EBITDA, of $6.4 billion were in line with an analysts' estimate. It declared a dividend of $0.23 per share, or about $200 million. That was down from $0.64 a share, or $800 million, a year earlier.

The company's share price was up 1.7% by 0919 GMT.

Anglo, which in July discontinued nickel and steelmaking coal assets that it is seeking to sell, aims to focus on copper and iron ore assets.

It demerged its platinum business in May, and said it is moving forward with plans to sell De Beers.

The company announced a potential partnership with Mitsubishi Corp for its Woodsmith fertiliser project in northern England, which it had placed on care and maintenance.

"We believe this potential partnership would add optionality and time to pursue further syndication/partnerships," said Goldman Sachs analysts.

DE BEERS SPIN-OFF

Anglo has reassessed the value of De Beers after the diamonds unit posted a third consecutive annual drop in production. It also cut De Beers' 2026 production forecast as weak demand and high inventories continue to weigh on the diamond market.

Anglo had already written down De Beers' value by about $3.5 billion over the past two years. "There is at the moment a plentiful supply of rough diamonds in the market," CEO Duncan Wanblad told reporters.

The sale of De Beers is at an advanced stage, he said. "We need to... get to final binding bids and then pick the partner that we want to go forward with and negotiate that with all the parties involved, including the government of Botswana," he added.

De Beers, which Anglo put up for sale as part of a broader restructuring, has drawn interest from multiple consortia, Wanblad said.

Botswana, already a 15% shareholder and source of 70% of its annual rough diamond production, has said it intends to increase its stake.

Angola is pursuing a 20-30% stake in De Beers, a proposal under discussion with other African diamond producers, a senior official from Angola's mining ministry told Reuters earlier this month.

Wanblad said he is "optimistic" that a deal will be signed this year.

TECK TIE-UP

As large-scale mining consolidation remains elusive despite pressure on companies to expand their copper portfolios, Anglo is the only major miner to have secured a deal, announcing in September a $53 billion all-stock, nil-premium merger with Teck.

On Friday, Wanblad said he expects the deal to be approved some time between September and March, as it awaits China and South Korea's regulatory approvals.

The deal, which would create the world's fifth-largest copper producer, proceeded even as the world's largest miner BHP Group BHP.AX attempted to take over Anglo.

The combined entity is projected to produce more than 1.2 million metric tons of copper annually.

Copper, a key metal for the power and construction industries, is poised to benefit from surging demand driven by electric vehicles and artificial intelligence.