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- De Beers’ IPO could be thwarted by weak demand for natural diamonds
De Beers’ plans to take its stock market private could be thwarted by weak demand for natural diamonds.
The speculation comes just three months after FTSE 100 miner Anglo American announced its diamond business would be “divested or spun off”.
In May, Anglo said it wanted to focus on copper and iron ore in reaction to a hostile takeover battle with Australian peer BHP.
De Beers’ IPO plans could be thwarted by weak demand for natural diamonds
A De Beers spokesperson told The Mail on Sunday that they were working on a possible listing and sale of the business as “both options are on the table”.
But Raj Ray, an analyst at BMO Capital Markets, said public markets had been a challenge for diamond companies.
He pointed to weak demand from China, inflation hitting consumer savings in the United States and lab-grown diamonds driving down prices.
He added: “While the long-term fundamentals of the natural diamond market still look promising and a significant decline in supply is expected by the end of this decade, the short- and medium-term outlook remains subdued.”
A £4bn float for De Beers would see it follow in the footsteps of some of its rivals.
Lucara, where the second-largest diamond in history was recently found, is located in Botswana, Canada and Sweden.
But when asked about the De Beers purchase, Lucara said it was “focused” on starting production at the Karowe mine in Botswana in 2028.
De Beers, founded in 1888, is owned by Anglo and the government of Botswana.
It is the world’s largest diamond miner by market value and is famous for creating the advertising slogan “a diamond is forever” in the 1960s.
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