Today, though it owns almost half of De Beers (45%), just 5% of Anglo American’s headline earnings came from the diamond miner in 2006 – down from almost 20% in 2004. This is mainly due to the surge in base metal prices and the rush to acquire resources by China and India. There are major shifts in policy at Anglo and a key question now is, will it want to hold onto to De Beers long-term?

Anglo, under new CEO Cynthia Carroll has been restructuring itself to sharpen its focus on its core business – mining. Having already shed its Mondi paper and packaging business and sharply reduced its holdings in AngloGold Ashanti last year, Anglo has now put Tarmac, its UK-based road and construction materials business up for sale.

Carroll has also undertaken a fair amount of house cleaning. A lot of decision-making has been centralised and placed directly in her hands in London, cutting out many of the regional Anglo bosses in South Africa. Anglo Platinum’s boss made a sudden exit this year, reportedly fired by Carroll because of the platinum unit’s poor safety record – a number of miners died in accidents in June. The South African government had also announced that it would crack down on what it considered hazardous mines.

Anglo’s South African relationships are at the top of Carroll’s priorities. Black empowerment negotiations for Anglo Platinum have dragged on much longer than expected and Anglo needs to get them over with and establish a good rapport with the government before its mining licences in South Africa come up for renewal. Carroll is determined to show that she means business. She has also been assiduously networking with the South African political establishment.

Black empowerment is also foremost on De Beers’ list of priorities. Relations between the mining group and the South African government have soured over the issue of developing a local diamond cutting industry. A statement by Jonathan Oppenheimer that the South African government would have to subsidize the differential in cutting costs between that country and India, triggered a furious reaction from the South African government. Jonathan’s father, De Beers chariman Nicky Oppenheimer rushed to defend his son and his company’s commitment to black economic empowerment. However, according to Chaim, through some dexterous verbiage, he maintained his son’s position that something needs to be done to address the difference in cutting costs. The relationship appears to be nearing some sort of crisis point.

Anglo owns more of De Beers than the Oppenheimers do. The beneficiation blowout could have an impact on its other businesses in South Africa – a vast majority of its total business holdings. Given how much it earns from diamonds overall and comparing the long-term prospects for its other mining businesses, Anglo is going to have a long hard look at its holdings in De Beers.