De Beers rough diamond production falls 4%

The De Beers Group has reported that rough diamond production fell by 4% to 7.9 million carats in the second quarter of 2022 (Q2), despite a “strong” demand for rough diamonds continuing in the quarter.

In Botswana, production decreased by 4% to 5.5 million carats due to lower grade ore being processed at both Jwaneng and Orapa, and production in Canada decreased by 28% to 0.6 million carats amid unscheduled plant maintenance and the impact of Covid-19 related absenteeism.

Additionally, South Africa production decreased by 4% to 1.2 million carats due to lower tonnes treated.

However, Namibia production grew by 67% to 0.6 million carats, amid continued “strong” performance from the Benguela Gem since the early delivery of the new diamond recovery vessel in Q1 2022.

Meanwhile, De Beers said a “strong” demand for rough diamonds continued into the Q2, with rough diamond sales totalling 9.4 million carats from three Sights. This compares with 7.3 million carats from two Sights in Q2 2021 and 7.9 million carats from two Sights in Q1 2022, both of which reportedly saw “strong” demand recovery following Covid-19 in 2020.

The company added that while consumer demand for natural diamonds continued to be robust in the first half, a deterioration of global macroeconomic conditions and reduced consumer spending could impact demand for diamond jewellery.

Despite this, the combination of ongoing sanctions against Russia, decisions from a number of US-based jewellery businesses to apply their own restrictions on purchases of Russian diamonds, and continued development of provenance initiatives “has the potential to underpin continued robust demand” for De Beers’ rough diamonds.

Additionally, the H1 2022 consolidated average realised price increased by 58% to $213/ct (£178.48/ct), up year-on-year from $135/ct (£113.12/ct), due to a larger proportion of higher value rough diamonds sold, as well as higher prices.

The rough price index also increased by 28% compared to H1 2021, reflecting “positive” consumer demand for diamond jewellery as well as tightness in inventories across the diamond value chain.

Looking ahead, production guidance for 2022 is increased to 32–34 million carats (previously 30-33 million carats), subject to trading conditions and the extent of further Covid-19 related disruptions.

source https://www.jewelleryfocus.co.uk/206026-de-beers-rough-diamond-production-falls-4