Debswana’ production remains high

TSHIAMO TABANE

Anglo American Plc’ the global mining company which owns De Beers, has revealed that Debswana production remained high during the first half of 2017 (H1 2017).

Orange

The Anglo American production report released last week shows that De Beers Group rough diamond production increased from 14 million carats recorded during the second half of 2016 (H2 2016) to 16 million carats during the first half of 2017 (H1 2017). Quarterly production increased from 7.4 million carats recorded during the first quarter of 2017 (Q1 2017) to 8.7 million carats during the second quarter of 2017 (Q2 2017).

According to Anglo American production results, Debswana’s 50/50 joint venture between Botswana government and De Beers Group contributed around 5.9 million carats into around 8.7 million carats De Beers’ Q2 2017 production. According to Anglo American production results Debswana contributed 11.1

million carats into De Beers 16 million carats produced during H1 2017. The mine which emerged the biggest contributor to De Beers H1 2017 production, Jwaneng mine produced around 5.9 million carats between January and June 2017, followed by Orapa mine which produced around 5 million carats and Letlhakane (232 thousand carats).

The De Beers subsidiary in South Africa contributed 2.5 million carats to De Beers H1 2017 production, Namdeb 863 thousand carats and De Beers Canada (1.6 million carats) compared with Debswana contribution amounting to 11.1 million carats, according to figures from the production report. Commenting on the results last, Anglo American CEO Mark Cutifani said Debswana production increase was driven by the ramp-up of Orapa plant 1 which was previously on partial care and maintenance in response to trading conditions in late 2015. He noted that Jwaneng mine, which is considered the world richest diamond mine is expected to continue boosting De Beers production following the successful implementation of cut 8 project which is intended to expand the mine. “First ore from  Jwaneng Cut-8 was extracted and processed in June 2017. Cut-8 will become Jwaneng’s main source of ore from 2018,” said the CEO.

The CEO indicated that increase in De Beers rough diamond production during H1 2017 was in line with the higher production forecast for 2017 and reflect stable trading conditions in the global market for diamonds. Cutifani stated that preliminary consumer demand data for diamond jewellery during H1 2017 showed continued growth in the US and slight improvements in China. According to the CEO the US market experienced broader changes in consumer behavior affecting the overall US retail environment, with growth in the independent jewellers sector. He stated that in India, retailer sentiment improved due to a return to more normal trading conditions following the government’s demonetisation programme. “Sentiment in the midstream remains positive following a reasonable Q4 2016 retail season, with evidence of Chinese retailers restocking and demonetisation in India having less impact than anticipated. This has supported good demand for De Beers’ rough diamonds,” said the CEO.

Anglo American has indicated that the extent of global growth in 2017, however, will be dependent upon a number of macro-economic factors, including the effect of US and China government policies on exchange rate movements. “Correspondingly, midstream demand for rough diamonds is expected to depend on the strength of different markets’ restocking requirements,” said the company.