The De Beers Group this week released its production report for the second quarter of the year, reporting an 88% increase in rough diamond production, translating to about a recovery of 7.8 million carats from its plants in Botswana, Canada, Namibia and South Africa.
The company’s production guidance for the year remains unchanged at 21 to 26 million carats on a 100% basis. The unit cost guidance is unchanged at US$80/carat.
However, De Beers noted that plant maintenance at Orapa and Jwaneng in Botswana, and a proposed production pause at Venetia in the second half is expected to substantially decrease production levels from current rates.
In Botswana, production increased to 5,488 million carats, due to the impact of the extended maintenance at Orapa as well as the planned mining of higher-grade ore at Jwaneng to optimise plant throughput.
In South Africa, production at Venetia increased to 734,000 carats, largely as a result of processing higher volumes of underground ore. In Canada, production increased to 1,028 million carats, as Gahcho Kué benefited from the planned processing of higher-grade ore from the new mining area.
In contrast, production in Namibia was broadly unchanged at 531,000 carats. Debmarine Namibia reported a recovery of 370,000 carats and Namdeb 161,000 carats. The company said the retirement of the Coral Sea vessel and planned maintenance of the Mafuta vessel at Debmarine were largely offset by the planned mining of higher-grade areas at Namdeb.
Rough diamond trading conditions remained challenging in the first half of the year, with the Middle East conflict adding to economic and consumer confidence risks, as well as synthetic lab-grown diamonds affecting demand for lower-value natural diamonds, adding pressure in more price-sensitive categories although stronger pricing for higher value goods supported a stable overall average price index throughout the period.
The consolidated average realised price declined by 32% to US$105/carat during the first half of the year. This was attributed to sales mix, with a higher proportion of lower-value goods due to the current inventory mix and a 16% decrease in the average rough price index.
Rough diamond sales during the reporting period totalled 7.1 million carats (6 million carats on a consolidated basis) from three Sights, generating consolidated rough diamond sales revenue of $665 million.
