De Beers Reduces Prices at Second Consecutive Sight

 

De Beers has sharply decreased its prices for select larger rough diamonds at this week’s sight, as the weak market has shown few signs of recovering.

The price cuts range from 5% to 15% in several categories for stones 0.75 carats and up, with an emphasis on 2-carat diamonds and larger, industry insiders told Rapaport News on Monday. Some of these goods already saw price reductions last month, they noted, while the 15% cuts are in a handful of sluggish categories that the miner left untouched in June.

De Beers has focused its adjustments on the lower-quality items for which demand has been especially slow, the sources said on condition of anonymity. Polished sales in SI to I2 clarities have slumped this year due to the overall weakness of US retail — the main market for this range — as well as competition from lab-grown diamonds.

The company also maintained its policy of allowing 30% buybacks for certain low-performing items, the industry sources said. Buybacks let sightholders sell a proportion of the rough they’ve purchased back to De Beers, allowing them to offload the stones that will generate the least profit. The limit is usually 10%.

De Beers declined to comment on the price changes.

The July sight — the sixth of the year — began Monday and runs through Friday in Gaborone, Botswana. It is the first sight since De Beers and the Botswana government announced a new 25-year mining license and a 10-year sales agreement that will see state-owned Okavango Diamond Company (ODC) gain access to 50% of the country’s rough over the course of 10 years.

The June session saw sales fall 32% year on year to $450 million after De Beers slashed prices of many categories above 1 carat. The negative trends that were present then have continued into July, with the seasonal US summer slowdown compounding the situation. Many manufacturers in India have lowered their polished production to around 50% capacity in response to low sales and tight margins. They have shifted to smaller, lower-value rough to keep factories running.

However, even a 15% price drop for rough is not enough to solve the problem, one executive at a sightholder company said Monday. “[Polished] prices have fallen more than that over the last couple of months. More importantly, there’s still no [foreseeable prospect] of sales. We are all still waiting for the US to wake up.”

Source: rapaport

Diamonds are for now: Botswana reach new deal with De Beers

Botswana has reached an eleventh-hour deal with diamond giant De Beers after months of tense negotiations that saw the continent’s top producer threatening to cut ties with the storied company.

The Botswana government and Anglo-American, the majority owner of De Beers, have reached an “agreement in principle”, the two sides said in a statement issued late Friday.

The agreement provides for a new 10-year agreement to sell the rough diamonds produced by Debswana — a joint venture equally owned by the government and De Beers — and a 25-year extension of its mining licenses.

The agreement also gives Botswana an increased 30 percent of diamond production for sale via the state-owned Okavango Diamond Company, progressively increasing to 50 percent in the final year of the contract, De Beers said in a separate statement on Saturday.

No value was given for the agreement.

The previous 2011 sale agreement between the southern African country, one of the continent’s richest, and the world’s largest diamond company by value, was extended exceptionally until June 30, 2023, due to the coronavirus pandemic.

Under terms negotiated by the two sides in 2011, De Beers received 90 percent of the rough diamonds mined, while Botswana had 10 percent to sell itself.

In 2020, Botswana’s share was hiked to 25 percent.

President Mokgweetsi Masisi had threatened to cut ties with the company if the latest talks proved unfavourable for his country.

“If we don’t achieve a win-win situation each party will have to pack its bags and go,” he said in February.

The country turned up the heat the following month by announcing it would soon conclude an agreement to take a 24 percent stake in the Belgian diamond manufacturer HB Antwerp.

Last year, De Beers obtained about 70 percent of its rough diamonds from Botswana.

Diamond mining accounts for a third of the landlocked country’s GDP.

Source: DCLA

De Beers Sales Slide as Slow Trading Continues

De Beers’ sales value fell this month as global rough demand weakened and the miner reduced prices of its larger stones.

Proceeds dropped 32% year on year to $450 million at 2023’s fifth sales cycle from $657 million in the equivalent period a year earlier, De Beers reported Wednesday. Sales declined 6% compared with the $479 million that the fourth cycle brought in. The total included the June sight as well as auction sales.

“Following the JCK [Las Vegas] show, and with ongoing global macroeconomic challenges continuing to impact end-client sentiment, the diamond industry remains cautious heading into summer,” said De Beers CEO Al Cook. “Reflecting this, we saw demand for De Beers rough diamonds during the fifth sales cycle of the year slightly softer than in the fourth cycle.”

De Beers lowered prices at the sight by 5% to 10% mainly in 2-carat categories and larger, as well as for some 1- to 1.5-carat items, market insiders said. It also extended its buyback program, which allows sightholders to sell goods back to the miner following the purchase.

This reflected weakness in the rough that produces polished above 0.30 carats, and especially the stones that yield 1-carat finished diamonds. These sizes are especially weak in the US market amid economic uncertainty and a lull in engagements, dealers explained. Rough under 0.75 carats has seen a mild recovery as Indian manufacturers look to fill their factories with low-cost material.

Source: DCLA

Anglo American reports latest diamond sales value for De Beers

Anglo American plc announces the value of rough diamond sales (Global Sightholder Sales and Auctions) for De Beers’ fourth sales cycle of 2023, amounting to US$480 million.

The provisional rough diamond sales figure quoted for Cycle 4 represents the expected sales value for the period 1 and 16 May and remains subject to adjustment based on final completed sales.

Al Cook, CEO of De Beers, said:

“Sales of our rough diamonds in the fourth sales cycle of the year saw a small decrease from the previous cycle as the industry has entered what is traditionally a seasonally quieter period. Rough diamond demand was also influenced by ongoing macroeconomic uncertainty and a slower pace of recovery in consumer demand from China than was widely anticipated.”

Source: DCLA

Botswana threatens break-up with De Beers in push for better diamond deal

Botswana may not renew a five-decade sales agreement with De Beers if the diamond producer doesn’t offer a larger share of rough diamonds to the state’s gem trading company, Okavango Diamond Company (ODC).

The move comes after the southern Africa nation acquired last month a 24% stake in Belgian diamond processing firm HB Antwerp for an undisclosed sum.

Analysts saw this deal as a way for Botswana to loosen the Anglo American-owned miner’s grip on its diamond sector, which is a major source of employment and tax revenue for the country.

De Beers and Botswana jointly own Debswana, which mines almost all of the roughs gems in the country — the world’s second-largest diamond producing nation after Russia.

The partnership has helped Botswana become one of Africa’s fastest growing economies, while supplying De Beers 75% of Debswana’s rough diamonds, which are then sorted and sold to sightholders around the world.

Debswana’s diamond sales hit a record $4.6 billion in 2022, compared to $3.4 billion in 2021.

President Mokgweetsi Masisi has threatened to walk away from the talks if Botswana does not get a larger share of Debswana’s output for marketing outside the De Beers system.

The government has not publicly stated what share it seeks, but it is believed to be as high as 50%, double its current allocation.

The two parties have been negotiating for several years to extend their 2011 mining rights and sales agreement, which is due to expire in June this year.

“Colonial” model
Rafael Papismedov, co-founder of HB Antwerp, told the Financial Times that a revised deal would help Botswana break free from the current model of being “stuck in a box that says you can only dig and wash the diamonds.”

Papismedov added that De Beers’ operating model carries on “colonization” principles, acting as if Botswana was incapable of building midstream capabilities for polishing diamonds.

Masisi wants more locals employed in the diamond sector, which accounts for a fifth of the country’s gross domestic product.

The largest diamond producer by value has said it is confident that it can maintain its partnership with Botswana, but that some of the negotiations are complex and require more time.

De Beers has said that the arrangement must make economic and strategic sense for both parties, adding that it is committed to supporting Botswana’s aspirations to grow its diamond industry.

The stakes are high for both sides, as they seek to secure their future in a volatile and competitive industry that has been hit by the covid-19 pandemic, changing consumer preferences and ethical concerns.

A new deal between Botswana and De Beers could have significant implications for the global diamond supply chain and the balance of power in the sector.

Source: mining.com

The 10.57-Carat ‘Eternal Pink’ Diamond Could Fetch $35 Million At Sotheby’s

“The Eternal Pink,” a 10.57-carat internally flawless fancy vivid purplish-pink diamond

“The Eternal Pink,” a 10.57-carat internally flawless fancy vivid purplish-pink diamond, will be offered at Sotheby’s New York on June 8. Its estimate is $35 million, which if achieved, would make it one of the most valuable gems ever sold at auction.

Its per-carat estimate of more than $3.3 million is the largest such estimate ever placed on a diamond or gemstone, according to Sotheby’s.

Quig Bruning, head of Sotheby’s Jewelry, Americas, says it’s the most vivid pink diamond to ever to come to market. “This color is the most beautiful and concentrated shade of pink in diamonds that I have ever seen.”

The cushion-shaped diamond will first be on view in Hong Kong April 1 – 7 to coincide with the 50th anniversary of Sotheby’s presence in Asia. The gem will then travel to Dubai, Singapore, Shanghai, Taiwan and Geneva before being offered as the top lot at Sotheby’s New York Magnificent Jewels auction on June 8.

The 23.78-carat rough which yielded The Eternal Pink was mined by De Beers at the Damtshaa mine in Botswana. Diamond manufacturer, Diacore, took six months to cut and polish the gem into its current color, described as “bubblegum” by the auction house.

“This stunning diamond is the best of the best when it comes to exceptional pink diamonds and it is difficult to overstate its rarity and beauty,” said Wenhao Yu, chairman of Jewellery and Watches at Sotheby’s Asia.

Sotheby’s has had some experience with important pink diamonds. The auction house sold the record-breaking CTF Pink Star, a 59.60-carat oval mixed-cut Fancy Vivid Pink Internally Flawless diamond, sold for $71.2 million—a world auction record for a diamond and any gemstone or jewel—in Hong Kong in April 2017. More recently, Sotheby’s sold the Williamson Pink Star, an 11.15-carat fancy vivid pink internally flawless diamond, for $57.7 million in a single-lot auction at Sotheby’s Hong Kong on October 8, 2022, setting the world record price per carat for any diamond or gemstone at more than $5.1 million.

Colored diamonds continue to demand high prices at auction with exceptional pink and blue diamonds leading the way. It is because of their rarity, according to Sotheby’s. Of all the diamonds submitted to the Gemological Institute of America, fewer than 3% are classified as colored diamonds. Within these colored diamonds, pink is one of the rarest to occur naturally in diamonds. A diamond that is more than 10 carats, with strong color, internally flawless clarity, and classified as a “vivid pink,” the highest grade for a pink diamond is extremely rare.

Source: forbes

HB Antwerp Invests in Botswana’s Young Diamond Talent

HB Antwerp has announced a partnership with Botswana to foster a new generation of diamond talent.

It has signed a a five-year memorandum of understanding with the Botswana International University of Science and Technology (BIUST).

They will jointly organize traineeships for Botswanan youth, offer scholarships for promising local talent, drive innovative projects backed by digital supply chains, and create job opportunities in the diamond sector.

The move comes as Botswana threatens to walk away from its long-standing sales agreement with De Beers, which is due for renewal at the end of June.

There has been media speculation that the Okavango Diamond Company (ODC), wholly owned by the Botswana government, was planning to sell its specials (+10.8-carats) to Belgian manufacturer HB Antwerp and to Canada-based Lucara and instead of De Beers.

HB Antwerp says it promotes respect for local communities, fair labor and pay, and investment in skills training and job placement opportunities for local workers.

Rafael Papismedov, its managing partner and strategy director, said: “Young people in Africa have incredible potential, but often do not have access to meaningful opportunities.

“We believe in the power of diamonds to catalyze positive change and look forward to leveraging this partnership to deliver on that potential for the Botswanan people.”

Source: DCLA

De Beers Sees Further Sales Slowdown

De Beers Rough Diamond Sorting

De Beers’ sales fell at its February trading session as sightholders deferred demand to later in the year amid uncertain market conditions.

The second sales cycle of 2023 grossed $495 million, a drop of 24% from last year’s equivalent period, the company reported Wednesday. Sales were, however, 9% higher than January’s $454 million.

“We know that sightholders planned more of their purchases for later in 2023, given the economic uncertainty at the time they were taking their planning decisions at the end of 2022,” said Al Cook, De Beers’ new CEO. “It is also encouraging to see some positive trends in end-client demand for diamond jewelry at the start of the year.”

The total includes the company’s February sight as well as auctions. The company raised prices of its smallest diamonds for the contract sale, but mostly maintained rates for larger stones after January’s price decline, customers told Rapaport News.

De Beers’ rough revenues have fallen 28% year on year to $949 million for the first two sales cycles of 2023, according to Rapaport calculations based on the company’s sight reports.

Source: DCLA

Botswana’s diamond trade is expected to depreciate due to reduced demand

Botswana diamond mining

Botswana’s finance ministry disclosed that the diamond trade in Botswana is set to fall back in 2023, due to reduced demand.
This is as opposed to 2022 when Botswana’s total mining production increased by 8.2%.
Botswana anticipates that the production of diamonds would fall by 1% in 2023, and growth in the diamond trade will decrease to 7%.
An official from Botswana’s finance ministry stated on Wednesday that Botswana anticipates its mining sector’s production to remain flat this year as the diamond business loses its luster as a result of a decline in consumer spending and reduced demand for diamond jewelry.

In 2022, the total mining production increased by 8.2%. Although Botswana is the continent’s biggest producer of diamonds, this year’s improvements in copper and coal will not make up for the fall in this commodity.

About the majority of Botswana’s diamonds are produced by Debswana, a joint venture between the government of Botswana and De Beers, a division of Anglo American Plc (AAL.L). In 2022, production increased by 8% to 24.1 million carats.

Trading in diamonds increased 41% in the last year, with Botswana also benefiting from Western consumers avoiding Russian stones as a result of its invasion of Ukraine.

Botswana anticipates that the production of diamonds would fall by 1% in 2023 and that growth in the diamond trade will decrease to 7% from 41% in 2018.

Botswana’s finance ministry senior policy advisor, Keith Jefferis expressed the same sentiments in a statement to the American-based news agency, Reuters.

He noted that the diamond trade would face a major setback during the year, due to a slowdown in consumer demand, particularly in the USA.

He stated, “We see the diamond sector having a bit of a tough year due to an expected slowdown in consumer demand particularly in the USA, because of pressure on real income and consumption.”

High demand for coal and anticipated increases in copper mine production will somewhat offset this.

The Motheo copper mine, owned by Sandfire Resources (SFR.AX), is scheduled to begin operations this year, while the Kalahari Copperbelt’s Khoemacau copper mine is ramping up production to reach its nominal capacity of 60,000 tonnes annually.

The two active coal mines in Botswana the state-owned Morupule and Minergy’s (MIN.BT) Masama mine saw record exports in 2017 and are now considering increasing output to keep up with the country’s high demand for coal internationally.

According to forecasts from the finance ministry, the government anticipates mining royalties to decrease from 6.1 billion pula ($3.41 billion) last year to 4,5 billion pula ($3.41 billion) in 2023. The amount of dividends owed to the state would likewise decrease, from 15 billion to 11,3 billion pesos, in 2022.

Source: africa.businessinsider

Botswana, De Beers row over diamond profits

Botswana diamonds and De Beers

Botswana’s President Mokgweetsi Masisi warned Sunday that his country could sever ties with South African diamond giant De Beers if talks to renegotiate a sales agreement prove unfavorable for his country.

The 2011 sales agreement governing the terms of marketing diamonds produced by Debswana – a 50-50 joint venture between the government and De Beers – expired in 2021.

It has been extended by the parties, who cited the coronavirus outbreak as the reason for the delay in concluding negotiations, and will end on June 30, 2023.

Speaking at a rally of his ruling Botswana Democratic Party (BDP) in his home village of Moshupa, about 65 kilometers from the capital Gaborone, Masisi warned, “If we don’t reach a win-win situation, each side will have to pack up and go home.”

Under the 2011 agreement, the mining company De Beers received 90% of the rough diamonds produced while Botswana, Africa’s largest diamond producer, received 10%. In 2020, Botswana’s share was increased to 25%.

In 2020, Botswana’s share was increased to 25%.

Today, “we got a glimpse of how the diamond market works, and we found out that we received less than we should have,” said Mr. Masisi, who spoke in both English and the local language, Tswana.

“We also found out that our diamonds are bringing in a lot of profit and that the (2011) agreement had not been favorable to us,” he added, before warning: “We want a bigger share of our diamonds. Business cannot continue as before.

Source: DCLA