If nothing else, the London stock market has been synonymous with mining shares – if you wanted to invest in world-class extractive resource companies, London was the place to do it.
But on Tuesday, one of the London market's mining mainstays, Anglo American, announced a plan to break up, separating its diversified mining assets from one another in a move that could result in yet another delisting from the London Stock Exchange.
Anglo will sell De Beers, 15 per cent of which is owned by the government of Botswana, its platinum mining operations (Amplats) in South Africa and its coking coal mines in Australia, leaving Anglo American itself to focus on copper and iron ore mining in South America and Southern Africa, as well as a fertiliser mining project in the north-east of the UK.
“These actions represent the most radical changes to Anglo American in decades,” said Duncan Wanblad, chief executive of Anglo American.
“I believe these are the right decisions to position Anglo American to capitalise on the outstanding resource endowment opportunities within our portfolio today.”
Many analysts feel that these “right decisions” were made so that Anglo could fend off takeover bids. While the board rejected BHP's revised £34bn takeover offer on Monday, Anglo has been assessing its assets for some time and the break-up plan was largely accepted as a fait accompli.
“Certainly, Anglo was feeling the heat and more so, after BHP revised its offer,” Varun Sikka, senior metals and mining analyst at Alphavalue, told The National.
“So, while this plan might have been work-in-progress since Anglo’s shares were hammered late last year, today’s announcement could have been hastened to fend off another, this time hostile, attempt from BHP.”
However, the break-up is leaving more questions than answers, not least on the issue of what the future holds for De Beers, which is the world's biggest diamond producer and mines the stones in South Africa, Namibia, Botswana and Canada.
Also, while there are now other diamond mining companies listed in London, for example, Petra Diamonds, for much of the last century the only way to invest in diamond mining on the London Stock Exchange (LSE) was through shares in Anglo American.
If Anglo's break-up results in it leaving the LSE, that investment pathway becomes closed off unless, as some speculate, De Beers eventually lists separately in London itself.
Recently, the sparkle has gone out of De Beers' financial numbers, with a drop in both sales and earnings last year.
Sales of rough diamonds dropped by 19 per cent in 2023 to 24.7 million carats, while total earnings plunged to $4.2 billion last year, compared to $6.6 billion in 2022.
Falling prices of rough diamonds and the advent of cheaper lab-grown diamonds took their toll on De Beers' bottom line.
Many analysts believed that the thinking inside Anglo was that De Beers was no longer the jewel in the crown, but had been replaced by copper thanks to decades of economic expansion by the likes of China and the advent of electric vehicles.
De Beers chief executive, Al Cook, said the Anglo American break-up “opens up new possibilities under new ownership”.
Saying he was “very confident in our future”, Mr Cook added that De Beers will present a new strategy later this month.
Diamond suitors
But now the market is asking just who could be a potential suitor for De Beers? Who likes it enough to put an engagement ring on it?
The government of Botswana already has a joint venture with De Beers called Debswana, but analysts say it is an outside possibility that it will bid for the 85 per cent of De Beers it does not own.
“The government of Botswana wanting to buy Anglo’s stake in De Beers seems far-fetched as the idea of state-owned and operational control of mining assets isn’t very efficient, and they may rather want to have an operating partner who views diamonds as a long-term play, despite the growing risk from lab-grown alternatives,” Mr Sikka told The National.
Even though a bid from Botswana is remote, the government will be concerned, given that around 16 per cent of the country's revenue come directly from the Debswana joint venture. As such, any potential suitor will need to woo Botswana as much as De Beers.
“The value of De Beers is fundamentally created by Botswana. Without Botswana, De Beers doesn’t exist,” Botswanan President Mokgweetsi Masisi told CNBC Africa this month.
A suitor may come from the luxury goods sector, according to Dan Coatsworth, investment analyst at AJ Bell.
“Theoretically, a luxury goods company is the most likely buyer of De Beers as marketing is so central to stirring up interest in the diamond market and having a direct supply of stones would be advantageous to such a business,” he told The National.
“Putting those strengths together would have major advantages.
“However, such a deal also comes with the operational risks of owning a mining company which can be significant and could alter the overall risk profile of a luxury group, hence the latter could see shareholder opposition if it was a listed entity,” he added.
No easy separation
It is possible that a bid may come from De Beers' own customer base. Most of De Beers rough diamonds are sold though its global sightholder sales network.
Ten times a year, sightholders, which are companies that cut and polish diamonds, gather in Botswana, Namibia and South Africa to buy De Beers diamonds and it is not unfeasible that a group of these diamantaires might raise enough cash for a bid.
Keith Bowman at Interactive Investor told The National that market rumours suggest Anglo has “been talking to luxury houses such as LVMH and Gulf sovereign-wealth funds” about buying its stake in De Beers.
However, there will be some debate over the valuation and final price tag that De Beers could eventually command.
The searching question the market is now asking is that if Anglo American has been looking to offload De Beers for some time, why has it not already been sold?
Mr Coatsworth notes that, in essence, there has been a “for sale” sign outside De Beers for some years and that Anglo American “might have lapped up an opportunistic bid for the group” if one had emerged.
As such, the new strategy De Beers is scheduled to reveal at the end of the month could contain plans for a stock market flotation.
“The fact we haven’t seen a deal to date might imply that willing buyers are thin on the ground, which could strengthen the argument for floating De Beers than finding a trade buyer,” Mr Coatsworth told The National.
“However, diamonds have fallen out of favour with investors because of concerns over the rise of lab-grown diamonds – meaning De Beers is not going to be an easy separation from Anglo American.”
Splitting De Beers from Anglo American may thus prove more delicate than cutting a rough diamond, and getting them together in the first place will look simple by comparison.
Named after the two Afrikaner settlers, Diederik and Johannes de Beer on whose farm diamonds were discovered, De Beers the mining company was established in 1888 by the British colonial entrepreneurs Cecil Rhodes (after whom Rhodesia, now Zimbabwe, was named) and Barney Barnato.
In 1926, De Beers was sold to Ernst Oppenheimer, a German immigrant who along with the American banker JP Morgan had founded Anglo American a few years before.
For the next 80 years, the Oppenheimer family essentially controlled De Beers alongside Anglo American until Anglo bought out the family's 40 per cent stake in De Beers in 2011 for $5.1 billion.
Ernest Oppenheimer was famous for once saying that “common sense tells us that the only way to increase the value of diamonds is to make them scarce, that is to reduce production.”
The principle of a monopoly controlling supply was always a matter of controversy and the US Department of Justice filed an antitrust case against De Beers in 1945.
However, by 2000 it became obvious to De Beers that competition had been chipping away at its grip on the diamond market for years and so it instigated a change in strategy. Gary Ralfe, De Beers' chief executive at the time, said the company wanted to be seen as “the leader of the diamond industry, not the custodian”.
In the 1980s, De Beers controlled around 90 per cent of the global diamond market, which had fallen to around 60 per cent by 2000, while today it commands around 29 per cent.
By the time De Beers switched to a more competitive strategy 24 years ago, the legendary stockpile of diamonds it used to control the market had largely been whittled down.
So, while De Beers may be a shadow of its former self, it is still a force to be reckoned with in the global diamond market, and a potential buyer may be in line for a bargain.
After all, Anglo American recently wrote down its book value by $1.6 billion to $7.6 billion, a potential sparkling price tag that could attract much interest.
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The Saudi Cup race card
1 The Jockey Club Local Handicap (TB) 1,800m (Dirt) $500,000
2 The Riyadh Dirt Sprint (TB) 1,200m (D) $1.500,000
3 The 1351 Turf Sprint 1,351m (Turf) $1,000,000
4 The Saudi Derby (TB) 1600m (D) $800,000
5 The Neom Turf Cup (TB) 2,100m (T) $1,000,000
6 The Obaiya Arabian Classic (PB) 2,000m (D) $1,900,000
7 The Red Sea Turf Handicap (TB) 3,000m (T) $2,500,000
8 The Saudi Cup (TB) 1,800m (D) $20,000,000
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The biog
Place of birth: Kalba
Family: Mother of eight children and has 10 grandchildren
Favourite traditional dish: Al Harees, a slow cooked porridge-like dish made from boiled cracked or coarsely ground wheat mixed with meat or chicken
Favourite book: My early life by Sheikh Dr Sultan bin Muhammad Al Qasimi, the Ruler of Sharjah
Favourite quote: By Sheikh Zayed, the UAE's Founding Father, “Those who have no past will have no present or future.”
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MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
Going grey? A stylist's advice
If you’re going to go grey, a great style, well-cared for hair (in a sleek, classy style, like a bob), and a young spirit and attitude go a long way, says Maria Dowling, founder of the Maria Dowling Salon in Dubai.
It’s easier to go grey from a lighter colour, so you may want to do that first. And this is the time to try a shorter style, she advises. Then a stylist can introduce highlights, start lightening up the roots, and let it fade out. Once it’s entirely grey, a purple shampoo will prevent yellowing.
“Get professional help – there’s no other way to go around it,” she says. “And don’t just let it grow out because that looks really bad. Put effort into it: properly condition, straighten, get regular trims, make sure it’s glossy.”
Honeymoonish
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Elie%20El%20Samaan%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ENour%20Al%20Ghandour%2C%20Mahmoud%20Boushahri%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Indian origin executives leading top technology firms
Sundar Pichai
Chief executive, Google and Alphabet
Satya Nadella
Chief executive, Microsoft
Ajaypal Singh Banga
President and chief executive, Mastercard
Shantanu Narayen
Chief executive, chairman, and president, Adobe
Indra Nooyi
Board of directors, Amazon and former chief executive, PepsiCo
Killing of Qassem Suleimani
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
SPEC%20SHEET%3A%20APPLE%20IPAD%20(2022)
%3Cp%3E%3Cstrong%3EDisplay%3A%3C%2Fstrong%3E%2010.9-inch%20Liquid%20Retina%20IPS%20LCD%2C%202%2C360%20x%201%2C640%2C%20264ppi%2C%20wide%20colour%2C%20True%20Tone%2C%20Apple%20Pencil%201%20support%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EChip%3A%3C%2Fstrong%3E%20Apple%20A14%20Bionic%2C%206-core%20CPU%2C%204-core%20GPU%2C%2016-core%20Neural%20Engine%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStorage%3A%3C%2Fstrong%3E%2064GB%2F256GB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPlatform%3A%3C%2Fstrong%3E%20iPadOS%2016%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMain%20camera%3A%3C%2Fstrong%3E%2012-megapixel%20wide%2C%20f%2F1.8%2C%205x%20digital%2C%20Smart%20HDR%203%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EVideo%3A%3C%2Fstrong%3E%204K%20%40%2024%2F25%2F30%2F60fps%2C%20full%20HD%20%40%2025%2F30%2F60fps%2C%20slo-mo%20%40%20120%2F240fps%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFront%20camera%3A%3C%2Fstrong%3E%2012MP%20ultra-wide%2C%20f%2F2.4%2C%202x%2C%20Smart%20HDR%203%2C%20Centre%20Stage%3B%20full%20HD%20%40%2025%2F30%2F60fps%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAudio%3A%3C%2Fstrong%3E%20Stereo%20speakers%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBiometrics%3A%3C%2Fstrong%3E%20Touch%20ID%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EI%2FO%3A%3C%2Fstrong%3E%20USB-C%2C%20smart%20connector%20(for%20folio%2Fkeyboard)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBattery%3A%3C%2Fstrong%3E%20Up%20to%2010%20hours%20on%20Wi-Fi%3B%20up%20to%209%20hours%20on%20cellular%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFinish%3A%3C%2Fstrong%3E%20Blue%2C%20pink%2C%20silver%2C%20yellow%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIn%20the%20box%3A%3C%2Fstrong%3E%20iPad%2C%20USB-C-to-USB-C%20cable%2C%2020W%20power%20adapter%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20Wi-Fi%20%E2%80%94%20Dh1%2C849%20(64GB)%20%2F%20Dh2%2C449%20(256GB)%3B%20cellular%20%E2%80%94%20Dh2%2C449%20(64GB)%20%2F%20Dh3%2C049%20(256GB)%3C%2Fp%3E%0A
Stage 2 results
1 Caleb Ewan (AUS) Lotto Soudal 04:18:18
2 Sam Bennett (IRL) Deceuninck-QuickStep 00:00:02
3 Arnaud Demare (FRA) Groupama-FDJ 00:00:04
4 Diego Ulissi (ITA) UAE Team Emirates
5 Rick Zabel (GER) Israel Start-Up Nation
General Classification
1 Caleb Ewan (AUS) Lotto Soudal 07:47:19
2 Sam Bennett (IRL) Deceuninck-QuickStep 00:00:12
3 Arnaud Demare (FRA) Groupama-FDJ 00:00:16
4 Nikolai Cherkasov (RUS) Gazprom-Rusvelo 00:00:17
5 Alexey Lutsensko (KAZ) Astana Pro Team 00:00:19
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Super Saturday results
4pm: Mahab Al Shimaal Group 3 | US$350,000 | (Dirt) | 1,200m
Winner: Drafted, Pat Dobbs (jockey), Doug Watson (trainer).
4.35pm: Al Bastakiya Listed | $300,000 | (D) | 1,900m
Winner: Divine Image, Brett Doyle, Charlie Appleby.
5.10pm: Nad Al Sheba Turf Group 3 | $350,000 | (Turf) | 1,200m
Winner: Blue Point, William Buick, Charlie Appleby.
5.45pm: Burj Nahaar Group 3 | $350,000 | (D) | 1,600m
Winner: Muntazah, Jim Crowley, Doug Watson.
6.20pm: Dubai City of Gold Group 2 | $300,000 | (T) | 2,410m
Winner: Old Persian, William Buick, Charlie Appleby.
6.55pm: Al Maktoum Challenge Round 3 Group 1 | $600,000 | (D) | 2,000m
Winner: Capezzano, Mickael Barzalona, Salem bin Ghadayer.
7.30pm: Jebel Hatta Group 1 | $400,000 | (T) | 1,800m
Winner: Dream Castle, Christophe Soumillon, Saeed bin Suroor.
The five pillars of Islam
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Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
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Voices: How A Great Singer Can Change Your Life
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RESULT
Bayern Munich 0 AC Milan 4
Milan: Kessie (14'), Cutrone (25', 43'), Calhanoglu (85')
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
If%20you%20go
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About Tenderd
Started: May 2018
Founder: Arjun Mohan
Based: Dubai
Size: 23 employees
Funding: Raised $5.8m in a seed fund round in December 2018. Backers include Y Combinator, Beco Capital, Venturesouq, Paul Graham, Peter Thiel, Paul Buchheit, Justin Mateen, Matt Mickiewicz, SOMA, Dynamo and Global Founders Capital
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COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Alaan%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202021%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Parthi%20Duraisamy%20and%20Karun%20Kurien%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20FinTech%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20%247%20million%20raised%20in%20total%20%E2%80%94%20%242.5%20million%20in%20a%20seed%20round%20and%20%244.5%20million%20in%20a%20pre-series%20A%20round%3Cbr%3E%3Cbr%3E%3C%2Fp%3E%0A
RESULTS
Welterweight
Tohir Zhuraev (TJK) beat Mostafa Radi (PAL)
(Unanimous points decision)
Catchweight 75kg
Anas Siraj Mounir (MAR) beat Leandro Martins (BRA)
(Second round knockout)
Flyweight (female)
Manon Fiorot (FRA) beat Corinne Laframboise (CAN)
(RSC in third round)
Featherweight
Bogdan Kirilenko (UZB) beat Ahmed Al Darmaki
(Disqualification)
Lightweight
Izzedine Al Derabani (JOR) beat Rey Nacionales (PHI)
(Unanimous points)
Featherweight
Yousef Al Housani (UAE) beat Mohamed Fargan (IND)
(TKO first round)
Catchweight 69kg
Jung Han-gook (KOR) beat Max Lima (BRA)
(First round submission by foot-lock)
Catchweight 71kg
Usman Nurmogamedov (RUS) beat Jerry Kvarnstrom (FIN)
(TKO round 1).
Featherweight title (5 rounds)
Lee Do-gyeom (KOR) v Alexandru Chitoran (ROU)
(TKO round 1).
Lightweight title (5 rounds)
Bruno Machado (BRA) beat Mike Santiago (USA)
(RSC round 2).
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
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The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
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COMPANY PROFILE
Name: Mamo Year it started: 2019 Founders: Imad Gharazeddine, Asim Janjua Based: Dubai, UAE Number of employees: 28 Sector: Financial services Investment: $9.5m Funding stage: Pre-Series A Investors: Global Ventures, GFC, 4DX Ventures, AlRajhi Partners, Olive Tree Capital, and prominent Silicon Valley investors. Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Zayed Sustainability Prize
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The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
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Intercontinental Cup
Namibia v UAE Saturday Sep 16-Tuesday Sep 19
Table 1 Ireland, 89 points; 2 Afghanistan, 81; 3 Netherlands, 52; 4 Papua New Guinea, 40; 5 Hong Kong, 39; 6 Scotland, 37; 7 UAE, 27; 8 Namibia, 27
