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Turkeys don’t vote for Christmas. But the world’s largest diamond company does. De Beers earned just $3m in the first half. The reason? Bulk purchasers slashed inventory as diamond shoppers binned the idea of bling. As a result, sales collapsed by 60 per cent compared with the year before to $1.4bn.

Still, De Beers has tried to sprinkle sparkle amid the gloom: it says it saw sales pick up in the second quarter, in spite of a 30 per cent rise in diamond prices since mid-March. It also hopes the Christmas season will restore spirits and lift retail demand.

In the meantime, De Beers has to weather the downturn. At the start of the year it closed production in Botswana and Namibia. It also cut its workforce by a quarter. The subsequent halving of costs is a remarkable reduction, but it is also probably unsustainable once “production holidays” end.

The drop in diamond sales has also returned De Beers’ debt problems to the limelight. It is still trying to refinance a $1.5bn loan that expires next March. Chances are the terms will prove so prohibitive it will have to turn to shareholders instead. These include Anglo American, with a 45 per cent stake. Anglo’s chief executive, Cynthia Carroll, currently fending off a proposed merger of equals with Xstrata, could do without such distractions.

De Beers is a small carat in Anglo’s bejewelled crown. But the diamond miner’s financial problems are a reminder of the issues its biggest shareholder faces elsewhere. That is particularly so at Anglo Platinum, also over-burdened with debt. De Beers has done much to reduce the chronic oversupply of diamonds.

Yet it is hard to escape the impression that its forced bullishness is partly designed to bolster Anglo’s takeover defences. It may yet turn out that diamonds won’t be Ms Carroll’s best friend.

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