29 October2024
De Beers is considering reducing its output even further amid continued weak demand and oversupply in the manufacturing sector. The announcement comes in response to the miner’s belief that the industry will require a lengthy recovery, it said last week. The company lowered its 2024 production plan by 3 million carats earlier this year.
“As previously announced, we reduced rough-diamond production from De Beers in response to market conditions,” said Duncan Wanblad, CEO of De Beers’ parent company, Anglo American.
“The diamond market remains challenging as the midstream continues to hold higher-than-normal levels of inventory and the expectation remains for a protracted recovery. As a result, and together with our partners, we will continue to assess the options to reduce production going forward.”
Production for the third quarter ending September 30 slid 25% year on year 5.6 million carats, compared to 7.4 million carats for the same period in 2023. Output in Botswana dropped 32% to 4 million carats amid a planned reduction at Jwaneng. Production in Namibia — where most diamonds come from marine mining — fell 14% to 456,000 carats. While De Beers intentionally lowered production at the site, the retrieval of higher-grade ore partially offset the decrease, it noted.
Output in South Africa grew 41% to 513,000 carats as mining at the recently transitioned Venetia underground ramped up. Meanwhile, in Canada, production slipped 11% to 603,000 after the miner processed lower-grade ore.
Sales were sluggish in the third quarter, with sightholders remaining cautious due to high inventory levels in the midstream and a “prolonged period of depressed consumer demand in China,” De Beers said.
Rough revenue for the period totalled $213 million from the sale of 2.1 million carats, compared to $899 million from 7.4 million carats over three sights in the same period of 2023. The variance was the result of De Beers combining sights 7 and 8 into one, the value of which will be realized in the fourth quarter, as sales continued past the end of the period, it noted.
For now, De Beers is maintaining its production guidance of 23 million to 26 million carats for the full year.
Source: https://rapaport.com/news/de-beers-mulls-further-diamond-production-cuts/
