Anglo American Reports Collapse in Diamond Sales
(Bloomberg) -- Anglo American Plc was forced to rely on profit from iron ore and copper as its fabled De Beers unit reported its weakest earnings since Anglo took control of the business almost a decade ago.
While the world’s biggest mining companies have so far been comparatively unscathed by the global pandemic as demand from China holds up and many of the most important mines continue to operate, it’s been a different story for diamonds. Sales plunged in the U.S. -- the most important market -- and trading hub India has also been hit hard.
Anglo is the most diversified of the big miners. While most commodities are closely tied to China’s fortunes, the diamonds and platinum Anglo mines are less exposed to the country. That’s been a major benefit in recent years, but is now hurting the company.
Anglo reported first-half underlying earnings before interest, taxes, depreciation and amortization of $3.35 billion on Thursday, 39% lower than a year earlier. Its debt rose to $7.6 billion as it spends on building new mines.
De Beers has been the biggest drag, posting profit of just $2 million in the first half after the pandemic devastated the diamond world. With jewelry stores closed, cutters and polishers stuck at home and global travel at a standstill, the entire diamond industry essentially came to a halt.
More broadly, Anglo’s natural resources portfolio delivered mixed results. The company reaped profits from selling iron ore, which accounted for more than half of the total, and copper, while coal earnings dropped sharply.
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