Anglo writes down De Beers, pressing on with business overhaul

By Clara Denina and Felix Njini

LONDON (Reuters) -Anglo American posted a $3.1 billion loss on Thursday after a writedown of its De Beers diamond business, forcing the miner to cut its dividend as it presses on with shedding unwanted assets.

Anglo aims to focus on copper and iron ore assets after BHP's failed takeover attempt last year. That means spinning off its platinum and diamond businesses after the sale of its coal and nickel mines.

CEO Duncan Wanblad said the process to sell or divest diamond specialist De Beers would accelerate in the second half of the year.

"Given the state of the markets and the shape of the business as it stands right now, I am really not expecting much traction or progress on that in the first half of this year, but picking up in the second half," Wanblad said on a media call.

Anglo's London listed shares rose 3.8% by 1150 GMT.

A $2.9 billion De Beers writedown means that Anglo has been able "to bring the carrying value of this business to a more reasonable $4.1 billion," Jefferies analysts said.

"We are encouraged by Anglo's operational improvements and continued progress on the company's restructuring," they added.

The $3.1 billion loss followed a profit of $283 million for 2023 as metal prices retreated and diamond sales struggled against competition from lab grown stones.

Other diversified miners including BHP, Rio Tinto and Glencore also reported a second consecutive year of declining earnings due to weaker metal prices, following two record years when prices soared.

Anglo booked a $3.8 billion impairment, mostly related to the diamond unit, and declared a dividend of $0.64 per share, or about $800 million, down from $0.96 a share previously.

De Beers has a stockpile of gems worth about $2 billion, amid a persistent lower price environment, Wanblad said.

Anglo would continue to evaluate either selling or listing De Beers to exit the diamonds business responsibly, he added.

The miner also said it is exploring jointly running its Los Bronces copper mine in Chile with that of state-backed Codelco's Andina operation. The two adjacent mines cut costs and boost production under the plan.

The mining sector has seen a jump in M&A activity, which stood at around $26 billion in 2023, and jointly operating assets is also a way to share risks, and costs.

"Joint mine plans are surprisingly rare despite the relatively straightforward synergies," RBC Capital Market analysts said.

Anglo on Tuesday said it's selling its Brazilian nickel business for up to $500 million. The company said it has so far raised about $5.3 billion from sales of its assets that the CEO said would be used to cut down debt.

(Reporting by Clara Denina in London and Felix Njini in JohannesburgEditing by Tomasz Janowski, Kirsten Donovan, Barbara Lewis, Elaine Hardcastle)