Anglo American on Track for Major Restructuring Despite Challenges in Coal and Diamond Sectors

Anglo American has reaffirmed its commitment to completing a significant restructuring by the end of next year, despite encountering major obstacles in its coal and diamond businesses.

Earlier this year, Anglo American announced its restructuring plan in response to a $49 billion (R906 billion) takeover bid from BHP Group, the world’s largest miner. The plan includes exiting diamond mining through the spin-off or sale of its De Beers unit, separating its platinum operations, and selling its coal mines. The company also halted the development of its Woodsmith fertilizer mine in the UK.

“We are advancing at pace,” said Chief Executive Officer Duncan Wanblad on Thursday. “We are on track to be substantially done with this process by the end of 2025.”

However, the company is facing significant challenges. A fire and explosion at its flagship Grosvenor coal mine in Australia have complicated the sale of its coal assets, which were initially considered the easiest part of the restructuring. Despite these setbacks, Wanblad stated that Anglo American still aims to sell the entire coal business, including the impacted mine, and hopes to finalize a deal by the end of the year.

The diamond market also presents difficulties. De Beers, Anglo’s diamond unit, is struggling due to weak global demand and an oversupply that halted the market last year. Although there were early signs of recovery, a slump in luxury spending in China has further delayed the rebound. In response, Anglo has cut its diamond production for the second time this year to address the oversupply.

Wanblad indicated that the recovery in the diamond market is now expected to be delayed until next year, but this will not deter the company from its plan to sell De Beers.

Additionally, Anglo American announced a $1.6 billion (R29.6 billion) impairment at the Woodsmith mine after deciding to slow down the project.

In its first-half results reported on Thursday, Anglo American posted underlying earnings of $4.98 billion (R92.1 billion), marking a 3% decrease from the previous year.

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