De Beers cuts back offering due to religious holidays

De Beers reported sharply lower revenue in its eighth sales event of the year, cutting back the size of its offering because of reduced demand as a result of religious holidays in India and Israel, two major rough diamond-buying countries.

De Beers reported revenue of $370m for the eighth of 10 annual sales, down from the $494m it realised at the same period a year earlier and well below the $507m recorded in its seventh sale in 2017.

“De Beers offered fewer rough diamonds for sale in Cycle 8, reflecting the concurrent timing this year of the sight sale with the closure of polishing factories in India and Israel for … religious holidays,” said De Beers CEO Bruce Cleaver. “Sales were in line with expectations, at what is a seasonally slower time for rough diamond demand.”

His message to the market was similar to that of Russian diamond miner Alrosa, the largest supplier of rough diamonds as measured by carats.

In September, Alrosa’s rough diamond sales fell to $306m, from $435m the year before.

“The decline in sales in September compared with the same month in 2016 is due to lower activity level in the market, particularly caused by the early beginning of the Diwali festival in India this year, for which reason many factories are closed for a long period.

“However, we expect traditional revival of the market situation in the fourth quarter, as the industry starts to prepare for the winter holiday season,” Alrosa vice-president Yury Okoyomov said on October 10.

Alrosa’s January to September rough diamond sales realised $3.29bn. De Beers has realised $4.384bn in rough diamond sales so far this year compared to $4.689bn for the same period a year earlier.

De Beers collects all the diamonds it mines in Botswana, SA, Namibia and Canada in Gaborone, Botswana, where it sorts and aggregates rough diamonds and makes up parcels of diamonds for 80 handpicked clients called sight holders. De Beers also auctions rough diamonds.

De Beers is 85%-owned by Anglo American and 15% by the Botswana government.