De Beers Lowers Full-Year Production Guidance on High Market Inventory Levels
Creamer Media Reporter
Mining Weekly Magazine
Diamond miner De Beers, a subsidiary of diversified miner Anglo American, has lowered its production guidance for the 2024 full-year to between 26-million and 29-million carats in response to the higher-than-average levels of inventory in the market and expectations of only a gradual recovery in demand for rough diamonds.
It had previously targeted production of 29-million to 32-million carats this year.
As a result of the lower production, the unit cost guidance for the full-year has been revised upwards, to about $90/ct, from $80/ct previously.
De Beers has reported a 23% year-on-year decrease in rough diamond production for the first quarter of this year to 6.9-million carats, primarily owing to production configuration changes implemented in response to the high market inventory levels and the sluggish demand recovery.
The miner says demand for rough diamonds began to recover during the first quarter, following improved demand for diamond jewellery in the US over the year-end holiday season.
The flexibility for rough diamond allocations offered by De Beers in 2023, combined with the voluntary import moratorium on rough diamonds into India in the fourth quarter of 2023, has helped to improve the industry’s balance between wholesale supply and demand; however, ongoing uncertainty around economic growth prospects has led to a continued cautious buying approach by sightholders and the recovery in rough diamond demand is expected to be gradual through the rest of the year, it points out.
In Botswana, first-quarter production decreased by 28% to five-million carats, driven by intentional lower production at Jwaneng and a short-term change in plant feed mix at Orapa to process existing surface stockpiles.
Production in Namibia was broadly unchanged at 633 000 ct, but output in South Africa decreased by 19% to 598 000 ct, owing to the continued depletion of lower-grade surface stockpiles prior to the planned ramp-up of underground operations at Venetia over the next few years.
Production in Canada decreased by 4% to 645 000 ct as a result of the planned treatment of lower-grade ore.
Meanwhile, the consolidated average realised price increased by 23% year-on-year to $201/ct, reflecting a change in the sales mix towards higher-value rough diamonds and the benefit of the price adjustment in Sight 1 of this year, which helped improve demand in higher price categories.
2024 Guidance
Production guidance(2) for 2024 is lowered to 26–29 million carats (previously 29–32 million carats) in response to the higher than average levels of inventory in the market and the expected gradual recovery in rough diamonds through the rest of the year.
Unit cost guidance for 2024 is revised to c.$90/carat (previously c.$80/carat(3)), reflecting the lower production.
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