Anglo American is considering an initial public offering (IPO) of its diamond division, De Beers, according to two unnamed sources cited by Reuters.
One of them suggested London as the most suitable location, while the second person stated that the possible listing was the default choice, even though the process is in its infancy.
The diversified miner unveiled on Tuesday its strategies for a future dissolution through a demerger or the sale of some of its assets, in opposition to BHP Group's $43 billion buyout offer.
The intention, according to Anglo chief executive Duncan Wanblad, is to sell or spin-off De Beers, without providing any further information.
Anglo holds 85% of De Beers while the remaining portion is owned by the government of Botswana, the location of the company's largest mines.
"De Beers is a great set of assets and it's a great business," Wanblad told a media call on Tuesday. "It is sitting at the bottom of a cycle. That cycle is more macroeconomic than fundamental."
De Beers might be valued between eight and ten times its core earnings, according to one of the individuals.
While Wanblad endorses the growth strategy that Anglo has devised for De Beers, the largest diamond producer globally in terms of value, Anglo considers it to be "better executed by different owners and in a different structure" from today's.
Similar to other luxury items, the global demand for diamonds has decreased.
Contractual customers of De Beers, which mines diamonds and manufactures synthetic stones through its Lightbox Jewelry division, have been granted flexibility and supply restrictions.
Anglo disclosed a division impairment charge of $1.6 billion in February.
It paid $5.1 billion to acquire De Beers in 2011, purchasing the 40% stake held by the Oppenheimer family.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
