DE BEERS SALES PLUNGE AS CUSTOMERS LOSE PROFIT

DE BEERS’S diamond sales plunged again at the company’s latest offering, underlining a slump in demand from the miner’s customers who are struggling to make a profit at current prices.

Sales by the Anglo American unit plunged 33 percent from a year ago to just $390 million (R5.58bn) and were down 6 percent from an offering last month. While this is often a quieter time of the year following the key holiday period, total sales for 2019 are still much weaker than in previous years. Diamond miners are facing a mini-crisis as demand remains weak, while supply, especially for smaller and cheaper stones, is abundant. That’s put pressure on polished prices, crimping the margins for De Beers’s customers who cut, polish and trade the stones. De Beers has held prices relatively stable so far this year. That has led to customers declining to take up all the stones they’d previously agreed to purchase, as they struggle to make a profit at current levels. Buyers have also been hit by a shortage of finance and stagnant end demand, and a weaker rupee has made gems more expensive for Indian manufacturers, who cut or polish about 90 percent of the world’s stones. De Beers sells gems at 10 sales a year in Botswana to a select group of customers. The buyers are expected to specify the number and type of diamonds they want, and then carry out the purchases at a price set by De Beers. | Bloomberg STATE-owned aerospace and military technology company Denel said yesterday that it had taken a decision that employees would only receive 85 percent of their salaries for June due to liquidity challenges. Denel said it was working to ensure that delayed portions of salaries were reimbursed to employees as soon as possible. “We are now faced with the unfortunate reality that the company is not in a position to fulfil the 100 percent salary obligation for June 2019,” chief executive Danie du Toit said. He added that the government, being the shareholder, as well as the board and management were continuously working to find sustainable solutions to the liquidity crisis facing Denel. Labour union Solidarity said it was shocked about the announcement, given that Denel had undertaken in December to indicate by the 15th of each month whether salaries could be paid. | African News Agency (ANA)