Anglo American gains on diamond price rally
Shares of Anglo American rose on Thursday after its diamond division, De Beers, reported an 88% surge in second-quarter production. The increase provided a brief boost for the mining company, which has faced falling natural diamond prices and delays in selling the unit.
Diamond rebound proves fleeting
The rally followed higher-grade ore at De Beers’ Jwaneng mine in Botswana and Gahcho Kue in Canada. The return of the Orapa mine from maintenance also contributed. Rough diamond output reached 7.8 million carats, compared with 4.1 million in the same period last year.
The improvement may not last. Anglo American warned that scheduled maintenance would reduce production in the second half of 2026. Earlier this month, it shut its only South African mine, cutting over 1,000 jobs to lower expenses.
The diamond market has weakened for years. Lab-grown stones, sold at much lower prices, have reduced demand for natural diamonds. That shift has cut more than $10 billion from De Beers’ estimated value since 2011. The decline has made it harder for Anglo American to sell the business, a key part of its plan to focus on copper and iron ore.
Other parts of the company performed steadily in the quarter. Copper production remained at 173,200 tonnes. Premium iron ore output fell 3% to 15.4 million tonnes due to maintenance at Kumba in South Africa and lower grades at Minas-Rio in Brazil. Manganese ore production increased 22% to 908,300 tonnes after cyclone disruptions in Australia.
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The company has been selling non-core assets. In May, it agreed to sell its Australian steelmaking coal business to Dhilmar for up to $3.9 billion, with completion expected by the first quarter of 2027. It is also working to sell its nickel business, though the deal requires European antitrust approval.
Despite the uneven results, Anglo American’s shares have risen almost 20% this year. Weak diamond prices and the unresolved sale of De Beers leave its long-term strategy dependent on copper, a transition that could take years.
CEO Duncan Wanblad noted ongoing market instability, including higher fuel and supply costs due to the Middle East conflict. He added that strong by-product credits and cost controls helped reduce unit cost guidance for copper in Chile and Peru.
The production increase at De Beers gave Anglo American a short reprieve. The diamond division’s future remains unclear. Without a buyer, the company must manage a declining market for natural stones while advancing its broader transformation.
