De Beers Lowers Production Plan

De Beers has reduced its production outlook for this year amid ongoing sluggishness in the diamond market and following a decline in first-quarter sales. 

The miner expects to unearth 26 million to 29 million carats in 2024, compared with an earlier forecast of 29 million to 32 million carats, parent company Anglo American said last week. 

The adjustment is “in response to the higher-than-average levels of inventory in the market and the expected gradual recovery in rough diamonds through the rest of the year,” Anglo American explained. 

De Beers’ sales volume slid 50% year on year to 4.9 million carats in the first three months of 2024, the parent company also reported. This reflected a slow recovery in the rough-diamond market as well as scheduling changes, with the miner holding two sights during the quarter, compared with three a year earlier.  

Still, appetite for rough began to recover during the first quarter following an improvement in diamond-jewelry demand in the US during the holiday season, Anglo American added. 

“The flexibility for rough-diamond allocations offered by De Beers in 2023, combined with the voluntary import moratorium on rough diamonds into India in [the fourth quarter of] 2023, has helped improve the industry’s balance between wholesale supply and demand,” the group continued. “However, ongoing uncertainty around economic growth prospects has led to a continued cautious purchasing approach by sightholders and the recovery in rough-diamond demand is expected to be gradual through the rest of the year.” 

De Beers’ production fell 23% year on year to 6.9 million carats in the first quarter as the company adapted to the market’s high inventory levels and its “expectation for a gradual recovery in rough-diamond demand,” management noted. 

Most of this reduction occurred in Botswana, where output dropped 28% to 5 million carats, “driven by intentional lower production at [the] Jwaneng [mine] and a short-term change in plant-feed mix at Orapa to process existing surface stockpiles.” 

The average selling price rose 23% year on year to $201 per carat on a consolidated basis, which excludes rough sales by joint-venture partners. This reflected a shift in the sales mix toward higher-value goods — consistent with a market-wide improvement in rough above 2 carats — as well as the impact of De Beers’ price reduction in January, which made these categories more attractive. De Beers’ average rough-price index slumped 20% for the same period. 

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Image: Rough diamonds on display at the De Beers offices in Calgary, Canada. (Ben Perry/Armoury Films/De Beers)