High demand pushes De Beers output towards 2008 levels

De Beers, the largest producer of rough diamonds by value, will run its mines at nearly full capacity in 2018 because the company expects improved demand for diamond jewellery.

De Beers forecast full-year production in 2018 of between 34-million and 36-million carats — a level last seen in 2008 — and which was just about as much as it can generate if it reached the upper end of that estimate, said CEO Bruce Cleaver.

In 2017, De Beers, an 85%owned subsidiary of Anglo American, increased diamond production by 22% to 33.5-million carats, with the new Gahcho Kue mine in Canada entering production during March 2017.

For 2019 and 2020, De Beers is expected to produce closer to 32-million carats as mining at the Venetia mine in Limpopo, SA, moves fully underground from being an opencast operation. The $2bn project will extend the mine’s life to 2046.

The big growth area for De Beers is Namibia where the value of the diamonds it mines dwarfs that from the rest of the operations in Botswana, SA and Canada. De Beers has commissioned the construction of a new mining ship to complement its recently commissioned exploration ship operating off the Namibian coast. The mining ship will pay for itself within three years, said Cleaver, adding De Beers was paying $200m towards its construction.

The Namibian sea diamonds fetched an average $539 per carat compared with the next highest average price of $235 per carat for Canadian diamonds .De Beers is anxious to ramp up exploration in SA, Cleaver said. After an impasse of several years, De Beers Consolidated Mines, the local division of De Beers, was granted 16 exploration licences in Kimberley.

“De Beers regards SA as prospective, there’s no doubt at all. We’d like to do more exploration there,” he said. “It follows that if the regulatory regime becomes clearer and more favourable it’s a place we’d want to look very hard at.”

Mining companies have reacted positively to overtures by President Cyril Ramaphosa, who has called for a fresh Mining Charter and a speedy conclusion to the Mineral and Petroleum Resources Development Act Amendment Bill, in the works since 2012.