Anglo American has slashed De Beers’ valuation anew, citing persistent price volatility, growing preference for lab-grown stones and an oversupply of rough diamonds in the market.

De Beers’ parent company reported loss attributable to equity shareholders of US$3.7 billion for the year ending December 31, 2025, driven by the US$2.3 billion pre-tax impairment at De Beers.

The diamond miner, meanwhile, recorded a US$511 million loss largely due to lower average rough price index and stock rebalancing initiatives.

Anglo American explained that the impairment was fuelled by lower-than-forecasted prices due to “greater shifting of customer preference” between natural and lab-grown diamonds, and surplus of rough diamonds amid prevailing demand. 

This marks the third impairment for De Beers in a span of three years. In February 2025, Anglo American wrote down the value of its diamond mining business by US$2.9 billion, following a US$1.6-billion impairment in 2024.

The group is divesting its stake in De Beers, adding that the sale is of its iconic diamond business is progressing.

Markets

Geopolitical and tariff uncertainties aggravated an already-challenging rough diamond market throughout 2025. According to Anglo American, demand for larger, higher-quality diamonds strengthened through the year but interest in smaller and lower-quality diamonds continued to wane amid growing supply from other producers.

“Polished wholesale diamond prices showed signs of stabilisation early in the year, but sentiment weakened sharply following the introduction of US tariffs on Indian exports,” noted Anglo American. “India remains the main cutting centre for natural diamonds and the US remains the largest end-market for diamond jewellery.”

Retail demand for natural diamonds “proved resilient” but was still affected by steady sales of lab-grown diamonds, it added. Strong performance in higher-end categories in the US largely offset reduced demand at the lower end of the assortment. India continued to deliver robust growth while demand in China remained muted.

Production revenue remained subdued at US$3.5 billion from US$3.3 billion in 2024, including rough diamond sales of US$3 billion from US$2.7 billion two years prior.

The miner's average realised diamond price was down 7 per cent to US$142 per carat in 2025, largely due to a 12 per cent decrease in the average rough price index. 

Outlook

According to Anglo American, near-term trading conditions could remain challenging, with ongoing volatility, conservative midstream inventory management and lab-grown diamond penetration expected to limit rough diamond demand. 

Gradual normalisation of inventory levels in the medium term, however, could signal some improvement. 

“While the full differentiation of natural and lab-grown diamonds is expected in the medium term, it has been delayed as some retailers seek to maintain high retail margins on lab-grown stones despite the continued reduction in wholesale prices,” the company added.

Consumer demand, meanwhile, is likely to remain stable in the US and India, particularly in the higher-end product areas, while a gradual recovery in China is expected as economic conditions stabilise.

De Beers' production guidance for 2026 is 21 to 26 million carats.