Mining giant De Beers is set to undergo a significant annual overhead reduction of $100 million as it grapples with persistent sluggish demand for diamonds, IDEX Online reports.
Anglo American, De Beers’ parent company, revealed in an investor update on December 8 that De Beers experienced losses in the latter half of this year but is strategically positioning itself for an anticipated surge in demand. Duncan Wanblad, Chief Executive of Anglo American, stated: “We are dedicated to streamlining De Beers and achieving a sustainable reduction of $100 million in annual overheads.”
He also said that Anglo American aims for a substantial $1.8 billion reduction in capital expenditures across its entire mining portfolio, encompassing platinum, copper, nickel, iron ore, polyhalite, and steelmaking coal.
Wanblad added: “We believe the fundamentals for diamonds are strong and we are positioning ourselves to supply into that demand bounce. Demand and prices for diamonds have fallen as global GDP growth has fallen. But all cycles end and we believe that the current weakness is temporary.”
According to another report on IDEX Online, Anglo American is now emerging as a possible target for takeover or merger as its valuation plummeted by more than $30 billion in less than two years. Shares in Anglo American , which is listed in London and Johannesburg, suffered their biggest one-day fall of the current financial crisis” following the December 8 investor update, according to the report.
Analysts are eyeing Glencore, the Swiss multinational commodity trading and mining company, as a potential suitor.
