Best friends? Anglo keeps De Beers' diamonds

(reuters.com) - Mining group Anglo American (AAL.L) has retained De Beers as a prize asset after a radical overhaul in the belief that surging Chinese and Indian demand for diamonds will outstrip dwindling supply even after a 2015 crunch. The group, in which Anglo American has an 85 percent stake, has seen its market share fall from over 80 percent in the 1980s to about a third now, losing it control of supply and unleashing price volatility. Its challenges are compounded by competition from synthetic diamonds and uncertain demand from customers in the "millennial" generation, aged roughly 18 to 34. Anglo has cut the value of De Beers assets in its books each year since 2012, after it had paid $5.1 billion for a 40 percent stake. But it remains the largest diamond producer by value ahead of Russia's Alrosa (ALRS.MM), securing access to top mines through close ties to countries such as Namibia, with which signed a 10-year sales deal, and Botswana.