- Introduces DiamondProof™️ for retailers to differentiate between natural and synthetic diamonds
- Botswana production decline the steepest at 32% to 4m carats
- SA production in sharp rise of 41% to 0.5 million carats
TLOTLO KEBINAKGABO
In response to weakening demand and rising midstream inventory levels, De Beers’ rough diamond production has decreased by 25 percent, totalling 5.6 million carats for the third quarter of 2024.
This is according to Anglo American’s latest Production Report for the quarter ending 30 September that highlights adjustments across De Beers’ operations in response to what has become a prolonged downturn in global diamond demand.
The steepest production decline came from Botswana where De Beers’ output dropped by 32 percent to 4 million carats.
Namibia down 14%
This was attributed to targeted production reductions at Jwaneng Mine, which is one of the world’s largest diamond mines by value.
Namibia saw a 14 percent decrease to 0.5 million carats, attributed to strategic cuts at Debmarine Namibia, partially offset by higher-grade mining and better recoveries at Namdeb.
In contrast, South Africa reported a 41 percent rise in production, reaching 0.5 million carats, as the Venetia underground mine ramped up its output.
Higher-than-normal inventory levels
Canada, however, recorded an 11 percent decline, producing 0.6 million carats due to planned processing of lower-grade ore.
“Trading conditions during the quarter continued to be challenging in light of higher-than-normal midstream inventory levels and the prolonged period of depressed consumer demand in China,” the report states.
In response, De Beers combined its Sights 7 and 8 into a single sales event, aiming to assist sightholders in managing excess inventory before the end-of-year retail season.
Sales from this combined event will appear in the company’s Q4 report because the event extended beyond the third-quarter period. As a result, De Beers’ rough diamond sales fell significantly in Q3.
Down sharply
The company reported selling 2.1 million carats, generating $213 million in revenue – down sharply from 7.4 million carats and $899 million during the same period last year. By comparison, Q2 sales in 2024 reached 7.8 million carats, producing $1.04 billion in revenue.
Despite lower volumes, the average realised price per carat has increased. For the year to date, the consolidated average price per carat rose by 4 percent to $160, primarily due to a higher proportion of premium diamonds in the sales mix.
“This increase reflects a larger proportion of higher-value rough diamonds being sold, partially offset by an 18 percent decrease in the average rough price index,” the report states, adding that the Q3 rough price index nevertheless remained largely unchanged from Q2.
New marketing partnerships
With the aim of strengthening consumer interest in natural diamonds, De Beers has formed new marketing partnerships with major diamond retailers, including Signet in the U.S. and Chow Tai Fook in China.
“The collaborations focus on driving long-term desirability for natural diamonds in two of the world’s leading consumer countries,” the report states, adding that promotional efforts will leverage the extensive reach of these retail giants.
Further supporting its strategy, De Beers introduced DiamondProof™️, a new device that enables retailers to rapidly differentiate between natural and lab-grown diamonds, in a move intended to provide consumers with enhanced confidence in the authenticity of their diamond purchases.
Slower-than-expected recovery
The tool is positioned as part of De Beers’ effort to “deter undisclosed lab-grown diamonds from entering the natural supply chain”.
Looking ahead, De Beers maintains its 2024 production guidance at 23-26 million carats.
However, given continued high inventory levels in the midstream and a slower-than-expected recovery, De Beers is evaluating potential production reductions with its partners, signalling further adaptation to persistently challenging market conditions.