Biggest Diamond Mining Companies of the World. Anglo American

Anglo American and De Beers
As a rule, the majority of mining industry experts engaged in research of diamond mining companies of the world keep under review De Beers only, unaware that it is just the visible part of the iceberg. Actually, it turns out that it is a certain part of Anglo American, the biggest mining holding established by Sir Ernest Oppenheimer in 1917. Starting off from a joint stock capital of one million pounds sterling raised in Great Britain and the U.S.A. (hence the holding’s name), the company won leading positions in 1920-1930 having implemented a range of significant projects in gold and diamond mining. In 1926, it became the largest shareholder of De Beers, a diamond company founded in 1888 by Cecil Rhodes, and from that time on it put under its control diamond mining and sales all over the world.

Anglo American 
At present time, Anglo American is one of the world’s major versatile mining companies producing platinum, gold, diamonds, coal, ferrous and non-ferrous metals, and industrial minerals, as well as engaged in paper and package making. Diamond mining is only one of its businesses now reduced to 4.6% of its operating profit derived from basic activities (Table 1).
Table 1
Operating profit of Anglo American in 2005-2007 by businesses
USD million
 

Years	Platinum	Gold	Diamonds	Coal	Non-ferrous metals	Industrial minerals	Ferrous metals and processing	Paper and packaging	Total of major businesses
2005	854 12.6	332 4.9	583 8.6	1019 15.0	1678 24.7	370 5.4	1456 21.5	495 7.3	6787 100
2006	2398 23.4	467 4.6	463 4.5	864 8.4	3876 37.8	336 3.3	1360 13.3	477 4.7	10241 100
2007	2697 25.5	202 1.9	484 4.6	614 5.8	4338 41.1	474 4.5	1432 13.5	324 3.1	10565 100

Annual reports of Anglo American for 2005-2007.

It is evident that such an organization pattern allows independence from a business in some single industry. Temporary decreases of profit in some industries are offset by its increases in others. The high degree of business diversification along with specialization in the mining industries permits this company to maintain successful competition with other major world companies. Consequently, Anglo American is a huge holding possessing interests in large-scale mining companies, including a 45% share of interest in De Beers (Fig. 1)
 
Fig. 1. Anglo American structure

De Beers
After re-organization of 2001, when De Beers was divided between the Oppenheimers (via the Central Holdings Group), Anglo American and the Government of Botswana, it turned into a private (closed) company owned by three shareholders. The company was then valued at USD17.6 billion and its shares were split as follows:
• Anglo American plc – 45% of stock;
• Central Holdings Group – 40% of stock;
• Government of Botswana – 15% of stock.
The currently existing pattern of the diamond business belonging to the De Beers Group is shown in Fig. 2. The company’s major performance and economic indicators for 2006-2007 are given in Tables 2 and 3.
Fig. 2. Diamond business pattern of De Beers.

Table 2
Major performance and economic indicators of De Beers in 2006-2007
 

Denomination of indicators	2006	2007
Proceeds, USD million	7030	6836
Diamond sales, USD million	6626	6422
Total profit, USD million	1432	1375
EBITDA, USD million	1232	1216
Net profit, USD million	730	521

Annual reports of De Beers for 2005-2007.

Table 3
Performance of De Beers’ diamond mining enterprises in 2006-2007
  

	De Beers Consolidated Mines	Namdeb	Debswana	Williamson Diamonds	De Beers Canada	Total
Diamond output, thousand carats	14 569 14 998	2 085 2 176	34 293 33 638	189 220	-      81	51 136 51 113
Processed ore, thousand tons	32 610 29 586	25 356 24 224	33 735 35 612	2 963 3 205	_-      113	94 664 92 740

Annual reports of De Beers for 2005-2007.
Note: 2006 is in the numerator; 2007 is in the denominator.

Yuri Danilov, Senior Research Fellow, Department of Rough and Polished Diamonds Complex Economy, Institute for Regional Economics of the North (Federal State Scientific Entity)