De Beers Slashes Output Amid Diamond Glut

RAPAPORT… De
Beers’ production dropped in the third quarter as the miner responded to a decline
in rough demand that has left it with an inflated stockpile of diamonds.



Output
fell 14% to 7.4 million carats for the period amid planned mine closures and
the transition from open-pit to underground mining at its Venetia project in
South Africa, parent company Anglo American said Tuesday.



“We continue to produce to weaker market
demand due to macroeconomic uncertainty as well as continued midstream
weakness,” the miner noted. “Diamond inventory has continued to build during
the third quarter due to the subdued market conditions. The elevated inventory
levels are not expected to unwind until 2020.”



De
Beers reduced production across all the countries in which it operates except Botswana,
the miner said. In De Beers’ South African operations, production fell 60% to 535,000
carats due to the lower volumes at Venetia. Production also ceased at the Voorspoed project in the
Free State province at the end of last year.



Output shrank 7% to 426,000 carats in Namibia following the shutdown
of De Beers’ Elizabeth Bay land operations in September 2018. However, production
remained flat in Botswana, at 5.7 million carats, with a 22% planned increase
at its Orapa project offset by an 18% decrease at the Jwaneng mine.



In
Canada, production dropped 34% to 779,000 carats, largely due to the closure of De Beers’ Victor operation in Ontario, which reached the end of its life
earlier this year.



Sales
volume jumped 48% year on year to 7.4 million carats, as the company held one
more sight than during the same period a year ago. However, overall rough
demand remained subdued, the miner explained.



In
the first nine months of 2019, the miner produced 23 million carats, down 12%
year on year. Its rough-diamond sales remained flat during the period.



Image: An employee sorting rough diamonds. (De Beers)