DE BEERS ROUGH DIAMOND PRODUCTION DECLINES
Due to a low demand for rough diamonds caused by the Coronavirus pandemic, De Beers rough diamond production declined in the fourth quarter of 2020.
During the period, rough diamond production went down by 14 percent to 6.7 million carats, which is said to have been driven by continued planned reductions in response to the decreased demand for rough diamonds.
During the same period, De Beers recorded 7.8 million carats.
The lower demand for rough diamonds is said to have been caused by the Covid-19 pandemic as well as operational challenges at Orapa that led to lower than expected production.
De Beers sources the bulk of its rough diamonds from Botswana at Debswana Mines, and during the last quarter of the year, this market alone experienced a decrease of 28 percent to 4.3 million from 5.9 million recorded in the same period the year before.
The decline is attributed to a planned treatment of lower grade material at Jwaneng, where production declined by 56 percent.
However, this massive decline was partly offset by a 9 percent increase at Orapa due to a planned improvement in grade.
This is despite the slower than anticipated plant restart in December following scheduled maintenance, as well as power supply interruptions affecting plant availability.
Despite this decrease in rough diamond production, De Beers says demand is, however, encouraging, especially in the last quarter of 2020.
The diamond group says indications show encouraging levels of consumer demand for diamond jewellery continued during the holiday season in the U.S while China also performed well.
During the quarter under review, rough diamond sales totalled 6.9 million carats from two sights, compared with 6.6 million carats from three sights in Q3 2020, and 7.0 million carats from two sights in Q4 2019.
De Beers has revised its production guidance to 32-34 million carats for 2021, from 3335 million carats subject to trading conditions, due to ongoing operational challenges and lower expected production from the final cut at Venetia, De Beers’ Canadian mine.