De Beers Output Rises in Strong Market

RAPAPORT… De Beers’ production grew 25% year on year to 8.9 million carats in the first quarter as the company responded to strong demand and benefited from improved conditions at its mines.

The rise partly reflected a favorable comparison with a period of operational difficulties a year earlier, when high rainfall in Botswana and at the Venetia mine in South Africa restricted output.

Production in Botswana jumped 25% to 6.2 million carats as this year’s better weather enabled higher processing levels at the country’s Orapa and Jwaneng mines. Ore grades also increased, parent company Anglo American said Thursday.

Output in Namibia — where most diamonds come from marine mining — leaped 33% to 451,000 carats, reflecting the fact that the Mafuta diamond-recovery vessel was undergoing planned maintenance during the first quarter of 2021. The early delivery of the new Benguela Gem ship also boosted the figures. In South Africa, production surged 46% to 1.7 million carats, while Canada saw a 15% drop to 604,000 carats.

Demand remained strong during the period, yet sales dropped 41% year on year to 7.9 million as De Beers held two sights, compared with three in the first quarter of 2021. The third sight of this year ended in early April and will count toward second-quarter revenue.

The company struck a cautionary tone for the second quarter, noting that the market situation had worsened.

“As we head into the seasonally slower second quarter of the year, diamond businesses are adopting a more cautious and watchful approach in light of the war in Ukraine and associated sanctions, as well as the impact of Covid-19 lockdowns in China,” De Beers said.


Image: A De Beers haul truck transporting kimberlite at the Venetia mine in South Africa. (Ben Perry/Armoury Films/De Beers)