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Maze Dive DIVE Nº 018

Anglo American (JSE: AGL): (JSE: AGL): De Beers Writedown Explained

6 min

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Anglo American (JSE: AGL) cut De Beers by $2.3bn and posted a $3.7bn loss, yet EBITDA rose. Impairments, lab-grown diamonds and the copper pivot.

Show notes

Somewhere at a braai this week, someone said: “Anglo lost $3.7 billion. It’s finished. Sell everything.” Before you grab the tongs and panic, let’s look at what actually happened.

By The Money Maze | Listen to the episode: Spotify

Anglo American published its 2025 results on 19 February 2026, and the headline was ugly. A loss attributable to shareholders of $3.7 billion, worse than the $3.1 billion loss the year before. The main culprit: a $2.3 billion pre-tax writedown of De Beers.

De Beers has now been marked down more often than a Woolies Christmas cake on 27 December.

But a big loss and a broken company are not the same thing. So let’s separate the drama from the business.

What is an impairment?

An impairment is an accounting writedown. It’s management saying, “That asset isn’t worth what we said it was. We were a bit optimistic. Sorry.”

It hits profit on paper. It does not mean Anglo dug a hole, threw $2.3 billion into it and set it alight while humming “Diamonds Are Forever”. The money was spent years ago. The writedown just admits the asset now looks less valuable.

The same thing happens in your own life: the bakkie you bought for R400,000 is worth R250,000 today. Your net worth just dropped. Your bank balance didn’t move. That’s why the loss and the cash story can be very different, and why you always read past the headline number.

Why De Beers is having a bad year

Three reasons, none of them romantic.

First, tariffs. India is the main cutting and polishing centre for natural diamonds, and the US is the biggest market for diamond jewellery. When the US slapped tariffs on Indian exports, Anglo said sentiment “weakened sharply”. Tax the polishing hub and the whole pipeline sulks.

Second, lab-grown diamonds. If it sparkles the same, looks the same and costs a lot less, the average oke buying a ring is not running lab tests in the Spur parking lot. Anglo said lab-grown retail sales “continue to have an impact”. Demand for bigger, high-quality stones actually strengthened during the year. It was the cheaper end that got squeezed.

Third, supply from other producers is putting pressure on demand for smaller, lower-quality diamonds.

So De Beers cut rough diamond production by 12% to 21.7 million carats, to avoid flooding a market that’s already in a mood. De Beers posted a negative EBITDA of about $0.5 billion for the year.

The number nobody at the braai mentions

Here’s the twist. Anglo’s underlying EBITDA from continuing operations rose 2% to about $6.4 billion, with a 33% margin. Copper did a lot of that lifting.

So while diamonds sulk in the corner, copper is quietly paying the bar tab. The company still paid a dividend too, in line with its policy of paying out 40% of underlying earnings, though it was smaller.

Anglo’s big spring clean

To understand why Anglo is willing to shrink De Beers, rewind to 2024, when BHP tried to buy the whole of Anglo. Not a gentle tap on the shoulder, more a “we’ll take the whole shop” moment. Anglo said no, and then started reshaping itself to prove it was worth more on its own.

Since then, it has demerged its platinum business, now Valterra Platinum, sold its steelmaking coal business, agreed to sell its nickel business, and is “progressing the separation” of De Beers. Anglo owns 85% of De Beers, with the Botswana government holding 15%, so this is less a Gumtree listing and more geopolitical chess with diamonds on the board.

And the big one: Anglo agreed to merge with Canada’s Teck to form Anglo Teck, a company built around copper and other metals the world needs for grids, electric cars and data centres.

Anglo American bull case

Strip out the diamond drama and the core business held up: EBITDA up, healthy margins, and copper doing the heavy lifting. A simpler company focused mainly on copper and iron ore is easier to understand and arguably easier to value. If the De Beers separation and the Teck merger land well, you get a leaner miner pointed at metals with long-term demand.

Anglo American bear case

Restructuring on this scale is hard. Selling De Beers involves governments, politics and a market that isn’t exactly begging to buy diamonds right now. Lab-grown stones are not going away. Merging with Teck brings integration risk. And until it’s done, Anglo is a company in transition, not a sleep-easy dividend share.

If it goes wrong, it becomes that half-built braai lapa that’s been “almost done” for three years.

Key numbers

  • De Beers impairment: $2.3bn pre-tax. So what: a paper writedown, not cash going up in smoke this year.
  • Loss attributable to shareholders: $3.7bn, from $3.1bn. So what: driven by the writedown.
  • Underlying EBITDA, continuing operations: about $6.4bn, up 2%. So what: the core business still earns.
  • Rough diamond production: down 12% to 21.7 million carats. So what: De Beers is producing to demand, not flooding the market.

Takeaway: Diamonds may be forever. Diamond valuations clearly aren’t. This story isn’t about sparkle. It’s about whether Anglo can finish the pivot before the market loses patience.

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Sources

  1. Preliminary results for the year ended 31 December 2025, Anglo American plc (RNS), 19 Feb 2026.
  2. Anglo American full year 2025 results, London Stock Exchange RNS, 19 Feb 2026.

This is not financial advice.

Transcript

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0:02 Welcome back to another episode of the Sunday Maze Dive, a feature of The Money Mate, the South African podcast for retail. Investors want to stop feeling like they're drowning in jargon and start navigating their markets like someone who actually knows what they're doing. I'm your host, Jay, and today we're taking a not so glamorously dive into Anglo American because somewhere this week at some bra, I can almost guarantee someone said Anglo made a 3.7 billion dollar loss.

0:34 It's finished. We need to sell everything. And that, my friends, is exactly why we Yeah. So let's start with the drama. Anglo chopped 2.3 billion U.S. dollars off the value of the beers. Again, 3rd write down in three years. So at this point the beers has been marked down more often than a Woolley's Christmas cake. On 27 December the reported a net loss of about $3.7 billion. Last year it was 3 billion.

1:05 So technically, yes, it's worse now everyone panics, but let's slow down a bit. This is not Anglo digging a hole, throwing 2.3 billion into it and setting it alight while singing Diamonds are Forever the season with payment which is accountant language for. We were a bit optimistic before, so sorry about that. And there's three reasons for diamonds having a bad hair day. And trust me, none of them are romantic. First, tariffs in India.

1:40 Most diamonds are cut and polished in India. You tax the polishing hub, suddenly the whole pipeline gets a bit grumpy. Second, you've got the lab grown diamonds and let's be honest, if it sparkles the same, looks the same and costs less, the average out buying an engagement ring is not running lab tests in the spill parking lot.

2:05 That puts pricing under pressure on natural stones. Thirdly, Angola, they pumping out more natural diamonds and more supply plus weaker demand equal softer prices. It's not conspiracy, it's economics 101 without the varsity debt losses at the Bears widened properly. Production was cut by about 12%. That's management basically saying let's not flood the market.

2:33 That's already sulking. The CEO says he hopes this is the lowest point. Hope Mining executives seems to love that word. And Anglo is to trying to sell its 85% stake in the beers. Botswana owns 15%. So this is not just a quick country listing. This is a geopolitical chase with diamonds on the board.

2:58 They say they are in advanced talks, possibly with combinations involving governments like Namibia and Angola. Translation. This is complicated, slow, political and very expensive if you mess it up. But this sale is part of something much bigger. Remember when VHP tried to buy out Anglo for about £39 billion? That was not a gentle tap on the shoulder, That was a proper will take the whole shop moment.

3:27 Since then Anglo has gone full screen cleaning mode. They're selling diamonds, exiting nickel, trying to offload coal, spinning up platinum, focusing hard on copper. They basically saying let's stop being everything to everyone and focus on the stuff the world actually needs for electrification. Copper is the golden child now. And here's the part nobody shouting at the Brian mentions. EBITDA actually rose slightly to about $6.4 billion, helped by copper.

4:00 So while diamonds are sulking in the corner, copper is quietly paying the power tab. No Anglo is. So is angler finished? No. Is Anglo in transition? Yes. This is not a klepto dividend and sleep peacefully phase. This is a reshaped the entire company phase.

4:24 If they successfully sell the beers and streamline properly you get a leaner miner focused on metals that actually matter for grids, infrastructure, renewables and industrial demand. If they mess it up then it becomes that half built Bry law per It's been almost done for the last five years. Execution matters. So getting to your stockpile starter pack for the JC Jedi Anglo American edition. Let's clean up some jargon we quickly before someone misquotes it on WhatsApp in payment.

4:58 It's an accounting route. Let's clean up the jargon quickly before someone misquotes it on WhatsApp in payment. That's an accounting write down. It hurts profits on paper, not automatically. Cash evaporating EBITDA. Its operating earnings before accounting. Gymnastics and financing costs. Asset disposal.

5:22 It's selling off parts of the business to focus on core operations. Hostile takeover. It's pretty much when someone tries to buy your house without you inviting them for tea first. Diamonds may be marked as forever, but diamond valuations? Well, clearly not. This Anglo story is just about spark. This Anglo story is not just about sparkle.

5:47 It's about strategy. The real question isn't whether the beers is struggling. The real question is whether Anglo can successfully pivot toward copper and streamline before the market loses patience and markets like Bri guests don't wait forever. So while my jokes might have been written down more than the beers, remember this is not financial advice. Please do your own research and speak to a licensed advisor. Until next Sunday, keep your portfolio diversified and your impairment well understood.

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