But says development of provenance initiatives and other factors have the potential to underpin continued robust demand for De Beers’ rough diamonds
Rough diamond production at the world’s leading diamond company, De Beers, decreased by 4 percent from 8.2 million carats in the first quarter of 2022 to 7.9 million carats in the second quarter of 2022 that ended 31 June 2022.
According to a report released by De Beers’ parent company, Anglo American, the decrease in rough diamond production is primarily due to the treatment of lower grade ore at operations in both Canada and Botswana.
Namibia production up by a massive 67%
“In Botswana, production decreased by 4 percent to 5.5 million carats due to lower grade ore being processed at both Jwaneng and Orapa,” Anglo noted in a statement. “Namibia production increased by 67 percent to 0.6 million carats, primarily driven by continued strong performance from the Benguela Gem since the early delivery of the new diamond recovery vessel in Q1 2022.”
Anglo noted that in the neighbouring South Africa, production decreased by 4 percent to 1.2 million carats due to lower tonnes treated. “Production in Canada decreased by 28 percent to 0.6 million carats due to treating lower grade ore, unscheduled plant maintenance and the impact of COVID-19 related absenteeism,” the Anglo statement continued.
Robust demand continued in Q2
Additionally, Anglo noted that strong demand for rough diamonds continued into the second quarter, with rough diamond sales totalling 9.4 million carats (8.3 million carats on a consolidated basis) from three Sights, compared with 7.3 million carats (6.5 million carats on a consolidated basis) from two Sights in Q2 2021 and 7.9 million carats (7.0 million carats on a consolidated basis) from two Sights in Q1 2022, both of which benefited from strong demand recovery following the impact of COVID-19 in 2020.
“While consumer demand for natural diamonds continued to be robust in the first half, a deterioration of global macro-economic conditions and reduced consumer spending could impact demand for diamond jewellery,” stated the Anglo statement. “Despite this, the combination of ongoing sanctions against Russia, decisions from a number of US-based jewellery businesses to apply their own restrictions on purchases of Russian diamonds, and continued development of provenance initiatives (such as the TracrTM blockchain platform) has the potential to underpin continued robust demand for De Beers’ rough diamonds.”
Rough price up 28% in H1 2012
Anglo said the H1 2022 consolidated average realised price increased by 58 percent to $213/ct (H1 2021: $135/ct), driven by a larger proportion of higher value rough diamonds sold, as well as higher prices. The company noted that rough price index increased by 28 percent compared to H1 2021, reflecting positive consumer demand for diamond jewellery as well as tightness in inventories across the diamond value chain.