Anglo American Annual Report 2012

BUSINESS OVERVIEWDe Beers is the world’s leadingdiamond company. Together withits joint venture partners, De Beersproduces approximately 35% of theworld’s rough diamonds by value, andemploys more than 23,000 peoplearound the world.In August 2012, Anglo Americancompleted its acquisition of the 40%shareholding in De Beers, for a totalcash consideration of $5.2 billion,thereby increasing Anglo American’sshareholding in De Beers to 85%.The remaining interest is held by theGovernment of the Republic ofBotswana (GRB).De Beers operates across key partsof the diamond value chain, includingexploration, production, the sellingof rough diamonds, the marketingof polished diamonds through itsproprietary diamond brand,Forevermark, and retail sales throughDe Beers Diamond Jewellers (DBDJ),a 50:50 joint venture with LVMHMoët Hennessy Louis Vuitton SA.De Beers’ mines are located in fourcountries: Botswana, Canada, Namibiaand South Africa. All operations areopen pit with the exception of SnapLake, an underground mine in Canada,and Namdeb Holdings’ alluvial andmarine mining operations in Namibia.Consumer demand forecasts$ Polished wholesale prices2012USA 37%China/Hong Kong 13%India 9%Japan 10%Gulf 8%Rest of World 22%Source: De BeersIn Botswana, De Beers’ interests areheld through the Debswana DiamondCompany, a 50:50 joint venture withthe GRB. Debswana’s operationsinclude Jwaneng, the world’s richestdiamond mine; Orapa, the world’slargest open-pit diamond mine;Letlhakane; and Damtshaa.In South Africa, De Beers has a 74%interest in De Beers ConsolidatedMines (DBCM), with the remaining26% held by Ponahalo Holdings, whichis a black economic empowermentconsortium. DBCM’s operationsinclude Venetia, which produces about70% of De Beers production fromSouth Africa; Voorspoed, a source oflarge and exotic coloured diamonds;and Kimberley Mines, a tailingsprocessing facility.In Namibia, De Beers’ interests areheld through Namdeb Holdings (NH),a 50:50 joint venture with theGovernment of the Republic ofNamibia (GRN). Diamonds are minedon land by Namdeb, and at sea byDebmarine Namibia, both of whichare wholly owned by NH. Marinemining is performed by a fleet offive mining vessels.In Canada, De Beers wholly owns itstwo mining operations; Victor, locatedin Northern Ontario; and Snap Lake, inthe Northwest Territories. De BeersConsumer demand forecasts$ Polished wholesale prices2017 FUSA 34%China/Hong Kong 17%India 14%Japan 7%Gulf 9%Rest of World 19%Source: De BeersDe Beers’mines arelocated in fourcountries:Botswana,Canada,Namibia andSouth Africa.INVESTINGFOREVERMARK– A UNIQUEPROMISEWhen it comes to purchasingluxury products, consumers wantassurance of the superior qualityand provenance of the product.De Beers Group provides thisthrough Forevermark, ourproprietary diamond brand,available in over 900 retailpartners in 12 markets includingthe core diamond jewellerymarkets of China, Japan, Indiaand the US.Every Forevermark diamondcomes with a promise of qualityand integrity, symbolised by theunique inscription inside thediamond. Each one is inscribedwith the Forevermark icon anda unique identification numberusing patented technologydeveloped by the De BeersGroup. Since the launch ofForevermark, more than 500,000diamonds have received theForevermark inscription asevidence that they have met thebrand’s high standards of quality,ethical integrity and provenance.The rigorous standards thatapply to Forevermark incorporatethe De Beers Best PracticePrinciples Assurance Programmethat provides consumers withassurance that the entire journeyof their diamond has met thehighest standards of ethical,social and environmentalperformance, and can be wornwith pride.ImageThe unique Forevermark inscription.Operating and financial reviewNote: These figures provide estimates and forecasts of the size and growth of main diamond consumer marketsbased on pipeline and consumer research commissioned by De Beers Group Strategy. 2012 results are preliminary.For more information turn to page 84Anglo American plc Annual Report 2012 83