De Beers Posts First Loss Since 2009

 

De Beers recorded its first annual loss since the aftermath of the global financial crisis as rough sales and prices slumped during the Covid-19 pandemic.

The miner’s underlying loss came to $102 million in 2020, compared with a profit of $45 million in 2019, parent company Anglo American reported Thursday. De Beers had not been in the red since 2009, according to Rapaport records.

“The onset of the Covid-19 pandemic, and measures taken by governments in response, had a profound impact on global diamond supply and demand,” the group explained. “Much of the industry was temporarily unable to operate, with up to 90% of jewelry stores closed at the peak of lockdowns, first in China, then in Europe and the US.”

Revenue slid 27% to $3.38 billion last year as the coronavirus closed stores, froze the Indian manufacturing sector, and prompted De Beers to offer sightholders unprecedented purchase flexibility. Rough sales volume fell 27% to 21.4 million carats.

The company’s rough price index, which tracks prices on a like-for-like basis, dropped 10%, reflecting reductions De Beers made from the August sight onward. The average realized price slipped 3% to $133 per carat as the miner sold a larger proportion of higher-value rough than in 2019, with both midstream and inventory mix influencing this trend.

Underlying earnings before interest, taxes, depreciation and amortization (EBITDA) fell 25% to $417 million as a result. A depreciation and amortization charge of $417 million, as well as finance costs, pushed the company out of the black.

However, an easing of restrictions and better trading conditions led to a partial recovery in the second half, with China showing an especially strong rebound and US demand “encouraging,” De Beers added.

“Recent consumer demand trends have been positive in key markets, and industry inventories are in a healthier position, providing the potential for a continued recovery in rough-diamond demand during 2021,” the company noted. Covid-19 could still affect this optimism, it cautioned.

Source: DCLA

De Beers Posts First Loss Since 2009

 

De Beers recorded its first annual loss since the aftermath of the global financial crisis as rough sales and prices slumped during the Covid-19 pandemic.

The miner’s underlying loss came to $102 million in 2020, compared with a profit of $45 million in 2019, parent company Anglo American reported Thursday. De Beers had not been in the red since 2009, according to Rapaport records.

“The onset of the Covid-19 pandemic, and measures taken by governments in response, had a profound impact on global diamond supply and demand,” the group explained. “Much of the industry was temporarily unable to operate, with up to 90% of jewelry stores closed at the peak of lockdowns, first in China, then in Europe and the US.”

Revenue slid 27% to $3.38 billion last year as the coronavirus closed stores, froze the Indian manufacturing sector, and prompted De Beers to offer sightholders unprecedented purchase flexibility. Rough sales volume fell 27% to 21.4 million carats.

The company’s rough price index, which tracks prices on a like-for-like basis, dropped 10%, reflecting reductions De Beers made from the August sight onward. The average realized price slipped 3% to $133 per carat as the miner sold a larger proportion of higher-value rough than in 2019, with both midstream and inventory mix influencing this trend.

Underlying earnings before interest, taxes, depreciation and amortization (EBITDA) fell 25% to $417 million as a result. A depreciation and amortization charge of $417 million, as well as finance costs, pushed the company out of the black.

However, an easing of restrictions and better trading conditions led to a partial recovery in the second half, with China showing an especially strong rebound and US demand “encouraging,” De Beers added.

“Recent consumer demand trends have been positive in key markets, and industry inventories are in a healthier position, providing the potential for a continued recovery in rough-diamond demand during 2021,” the company noted. Covid-19 could still affect this optimism, it cautioned.

Source: DCLA

De Beers Taps Into Unexpected Natural Wonders For New Collection

 

In celebration of the natural beauty of the countries from which its diamonds are produced, De Beers Jewellers has introduced Reflections of Nature, the venerable house’s latest collection in the stratospheric world of high jewelry.

The dazzling collection features five sets Okavango Grace, Motlatse Marvel, Namib Wonder, Landers Radiance and Ellesmere Treasure with a total of 39 exclusive pieces.

The latter is probably the most unexpected as few laymen would recognize Canada as a source for diamonds. Yet, Ellesmere Island in the Canadian Arctic is the third largest producer of diamonds in the world.

The pieces in this DeBeers set were designed to reflect the island’s glacial beauty and are evocative of the ice and frosted flora of Ellesmere Island, where diamonds were first discovered in 1991. While colored stones are employed throughout the other Reflections of Nature sets, the Ellesmere Treasures are indeed treasures with their all white diamonds.

A UNESCO World Heritage Site, the Okavango Delta in Botswana is inspiration for De Beers’ Okavango Grace set. Recalling the lush wetlands and the fluidity of the delta’s reeds, the set features a color scheme of rough pink, green, brownish pink, purple and grey diamonds suspended in organic strands that move freely with the wearer.

Design of the Namib Wonder set is based on the beauty of the world’s oldest and largest sand dunes found in Namibia’s  Namib Desert. Brilliant white and yellow diamonds set the stage for white rough diamonds, which are cap-set allowing them to move more freely and catch the light from every angle.

The sunburst motif of the Motlatse Marvel earrings is inspired by the brilliant sunrises and sunsets over South Africa’s Motlatse Canyon. (Photo courtesy of De Beers Jewellers)

The spectacular sunrises and sunsets over the peaks and caverns of Motlatse Canyon in South Africa provide the creative cue for the colorful Motlatse Marvel set. Pink, yellow and white diamonds conjure bejeweled sunbursts.

The teaming underwater universe of South Africa’s Landers Reef is suggested in the Landers Radiance multi-colored, multi-cut theme. “A rainbow of white and fancy color diamonds evokes the vibrant colors of corals and fish, shimmering in sunlit waters” is how De Beers’ promotional materials describe this set.

With introduction of the collection, De Beers Jewellers is reaffirming its commitment to environmental conservation through its widespread Building Forever sustainability initiative and the houses’s commitment to its code of best practices principles. That includes conservation of  “The Diamond Route,” some 50,000 acres throughout Southern Africa.

Source: DCLA

De Beers Taps Into Unexpected Natural Wonders For New Collection

 

In celebration of the natural beauty of the countries from which its diamonds are produced, De Beers Jewellers has introduced Reflections of Nature, the venerable house’s latest collection in the stratospheric world of high jewelry.

The dazzling collection features five sets Okavango Grace, Motlatse Marvel, Namib Wonder, Landers Radiance and Ellesmere Treasure with a total of 39 exclusive pieces.

The latter is probably the most unexpected as few laymen would recognize Canada as a source for diamonds. Yet, Ellesmere Island in the Canadian Arctic is the third largest producer of diamonds in the world.

The pieces in this DeBeers set were designed to reflect the island’s glacial beauty and are evocative of the ice and frosted flora of Ellesmere Island, where diamonds were first discovered in 1991. While colored stones are employed throughout the other Reflections of Nature sets, the Ellesmere Treasures are indeed treasures with their all white diamonds.

A UNESCO World Heritage Site, the Okavango Delta in Botswana is inspiration for De Beers’ Okavango Grace set. Recalling the lush wetlands and the fluidity of the delta’s reeds, the set features a color scheme of rough pink, green, brownish pink, purple and grey diamonds suspended in organic strands that move freely with the wearer.

Design of the Namib Wonder set is based on the beauty of the world’s oldest and largest sand dunes found in Namibia’s  Namib Desert. Brilliant white and yellow diamonds set the stage for white rough diamonds, which are cap-set allowing them to move more freely and catch the light from every angle.

The sunburst motif of the Motlatse Marvel earrings is inspired by the brilliant sunrises and sunsets over South Africa’s Motlatse Canyon. (Photo courtesy of De Beers Jewellers)

The spectacular sunrises and sunsets over the peaks and caverns of Motlatse Canyon in South Africa provide the creative cue for the colorful Motlatse Marvel set. Pink, yellow and white diamonds conjure bejeweled sunbursts.

The teaming underwater universe of South Africa’s Landers Reef is suggested in the Landers Radiance multi-colored, multi-cut theme. “A rainbow of white and fancy color diamonds evokes the vibrant colors of corals and fish, shimmering in sunlit waters” is how De Beers’ promotional materials describe this set.

With introduction of the collection, De Beers Jewellers is reaffirming its commitment to environmental conservation through its widespread Building Forever sustainability initiative and the houses’s commitment to its code of best practices principles. That includes conservation of  “The Diamond Route,” some 50,000 acres throughout Southern Africa.

Source: DCLA

De Beers Sales Hit Three-Year High

 

De Beers’ rough-diamond sales soared to $650 million in January, its highest for any month since 2018, as manufacturers replenished inventory following the holiday season.

The total was 18% more than the $551 million the miner garnered a year earlier, and 44% above the $452 million it reported in December, De Beers said Wednesday. This was despite the company implementing a sharp increase in rough prices.

“With the midstream starting the year with low levels of rough and polished inventories, and following strong sales of diamond jewelry over the key holiday season in the US, we saw good demand for rough diamonds at the first cycle of the year as midstream customers sought to restock and to fill orders from retail businesses,” said De Beers CEO Bruce Cleaver. “Sales of rough diamonds are also being supported by expected demand ahead of Chinese New Year and Valentine’s Day.”

De Beers held the sight in its usual Botswana location, in addition to viewings in Antwerp and Dubai, as the Covid-19 pandemic has prevented many customers from traveling overseas. Its revenue figure encompasses sales that took place between January 18 and February 2, including the sight and auctions.

The January sight is usually one of the biggest of the year, especially after a positive holiday season. Even so, this year’s opening sale of the year exceeded all monthly sales going back to January 2018, when revenues came to $672 million.

De Beers raised prices by 4% to 5% at the sight in response to the improving balance between supply and demand, as reported last month by Rapaport News. Alrosa lifted its prices by 6% to 7%, with the Russian miner scheduled to publish its January sales value on February 10.

Source: DCLA

De Beers Sales Hit Three-Year High

 

De Beers’ rough-diamond sales soared to $650 million in January, its highest for any month since 2018, as manufacturers replenished inventory following the holiday season.

The total was 18% more than the $551 million the miner garnered a year earlier, and 44% above the $452 million it reported in December, De Beers said Wednesday. This was despite the company implementing a sharp increase in rough prices.

“With the midstream starting the year with low levels of rough and polished inventories, and following strong sales of diamond jewelry over the key holiday season in the US, we saw good demand for rough diamonds at the first cycle of the year as midstream customers sought to restock and to fill orders from retail businesses,” said De Beers CEO Bruce Cleaver. “Sales of rough diamonds are also being supported by expected demand ahead of Chinese New Year and Valentine’s Day.”

De Beers held the sight in its usual Botswana location, in addition to viewings in Antwerp and Dubai, as the Covid-19 pandemic has prevented many customers from traveling overseas. Its revenue figure encompasses sales that took place between January 18 and February 2, including the sight and auctions.

The January sight is usually one of the biggest of the year, especially after a positive holiday season. Even so, this year’s opening sale of the year exceeded all monthly sales going back to January 2018, when revenues came to $672 million.

De Beers raised prices by 4% to 5% at the sight in response to the improving balance between supply and demand, as reported last month by Rapaport News. Alrosa lifted its prices by 6% to 7%, with the Russian miner scheduled to publish its January sales value on February 10.

Source: DCLA

 

De Beers and Alrosa Raise Rough Prices

The two largest diamond miners increased prices at this week’s rough sales as demand improved due to post-holiday restocking and strong trading ahead of the Chinese New Year.

De Beers raised prices by an average of 4% to 5% at its first sight of 2021, while Alrosa’s increases were around 6% to 7%, industry insiders told Rapaport News Monday. Both companies implemented steeper hikes in larger categories than for smaller goods, sources said.

“Alrosa makes sure that prices reflect the actual market trends and a confirmed real demand,” a spokesperson for the Russian miner said. De Beers declined to comment.

The miners have steadily been reversing the prices cuts they made in the second half of last year. De Beers’ price rise was its second in a row, with January prices almost back to pre-pandemic levels, sightholders noted.

The rough market showed momentum in January following a better 2020 holiday season than many had feared earlier in the year. Cutting factories in India raised polished production to full capacity as shortages emerged and retailers restocked, prompting manufacturers to buy rough in large quantities.

Demand rose on the secondary market, with De Beers clients able to make profits of 5% to 7% by reselling goods ahead of the sight. Those premiums declined slightly following the price increase.

“[Polished] inventory levels are the lowest for at least the past seven or eight years,” an executive at a sightholder said. “That’s the reason people are going to be more aggressive in their purchasing,” he continued, adding that some traders foresaw a spike in consumer demand due to government stimulus packages.

Prices at smaller miners’ tenders were higher still — in contrast to mid-2020, when manufacturers could get goods up to 25% cheaper on the open market compared with De Beers and Alrosa boxes. Tender prices fluctuate with the market conditions more than contract-sale prices do, as the smaller rough producers have greater liquidity needs.

Some traders expressed concern that the surge in rough purchases could lead to an oversupply, as Chinese retailers have almost finished preparing their inventories for the upcoming lunar festival on February 12.

“It’s time to go back to business, but it’s no time to push your production to the max and buy rough at any price with the excuse that your factory needs it,” another sightholder argued. “The end of year has been OK, including in the States. There are great expectations for a fantastic Chinese New Year, but the reality is that any Chinese retailer has stopped buying as from this week.”

Amid the uncertainty, Alrosa kept its policy of allowing customers to defer 100% of their allocations in January, noting that it wished to uphold the balance between supply and demand.

De Beers also allowed sightholders to refuse a proportion of their allocations for goods up to around 0.75 carats, while maintaining its standard flexibility — including 10% buybacks — in larger categories.

De Beers’ sight began on Monday in Botswana and runs until Friday, with viewings also taking place in Antwerp and Dubai. Alrosa’s sale started last Friday and continues for a week.

Source: DCLA

 

De Beers and Alrosa Raise Rough Prices

The two largest diamond miners increased prices at this week’s rough sales as demand improved due to post-holiday restocking and strong trading ahead of the Chinese New Year.

De Beers raised prices by an average of 4% to 5% at its first sight of 2021, while Alrosa’s increases were around 6% to 7%, industry insiders told Rapaport News Monday. Both companies implemented steeper hikes in larger categories than for smaller goods, sources said.

“Alrosa makes sure that prices reflect the actual market trends and a confirmed real demand,” a spokesperson for the Russian miner said. De Beers declined to comment.

The miners have steadily been reversing the prices cuts they made in the second half of last year. De Beers’ price rise was its second in a row, with January prices almost back to pre-pandemic levels, sightholders noted.

The rough market showed momentum in January following a better 2020 holiday season than many had feared earlier in the year. Cutting factories in India raised polished production to full capacity as shortages emerged and retailers restocked, prompting manufacturers to buy rough in large quantities.

Demand rose on the secondary market, with De Beers clients able to make profits of 5% to 7% by reselling goods ahead of the sight. Those premiums declined slightly following the price increase.

“[Polished] inventory levels are the lowest for at least the past seven or eight years,” an executive at a sightholder said. “That’s the reason people are going to be more aggressive in their purchasing,” he continued, adding that some traders foresaw a spike in consumer demand due to government stimulus packages.

Prices at smaller miners’ tenders were higher still — in contrast to mid-2020, when manufacturers could get goods up to 25% cheaper on the open market compared with De Beers and Alrosa boxes. Tender prices fluctuate with the market conditions more than contract-sale prices do, as the smaller rough producers have greater liquidity needs.

Some traders expressed concern that the surge in rough purchases could lead to an oversupply, as Chinese retailers have almost finished preparing their inventories for the upcoming lunar festival on February 12.

“It’s time to go back to business, but it’s no time to push your production to the max and buy rough at any price with the excuse that your factory needs it,” another sightholder argued. “The end of year has been OK, including in the States. There are great expectations for a fantastic Chinese New Year, but the reality is that any Chinese retailer has stopped buying as from this week.”

Amid the uncertainty, Alrosa kept its policy of allowing customers to defer 100% of their allocations in January, noting that it wished to uphold the balance between supply and demand.

De Beers also allowed sightholders to refuse a proportion of their allocations for goods up to around 0.75 carats, while maintaining its standard flexibility — including 10% buybacks — in larger categories.

De Beers’ sight began on Monday in Botswana and runs until Friday, with viewings also taking place in Antwerp and Dubai. Alrosa’s sale started last Friday and continues for a week.

Source: DCLA

De Beers says recovery to Extend – Well Beyond 2020

 

The diamond sector’s rebound from the Covid-19 crisis will feature ups and downs that will continue into next year at least, De Beers predicted.

“The demand recovery is not expected to be linear, particularly as localized lockdowns take place,” De Beers explained Monday in its annual Diamond Insight Report. “Retailer expectations for the second half of the year are mixed, with more optimism in the US but muted sentiments in India and the Far East.”

The pandemic severely hit Chinese demand in the first quarter of this year and US sales in the second quarter, with the recovery likely to “extend well beyond 2020,” the company noted. The impact of Covid-19 on the global economy and the second wave of lockdowns in the fourth quarter have further harmed consumer spending, it added.

“The consequences of these events will determine the short to medium-term outlook,” De Beers added. “However, a weakening US dollar could offset some of the softness in demand in local currencies.”

The pandemic dented the positive trends that were visible at the end of 2019, De Beers said. Diamond-jewelry sales to Chinese consumers slid 45% year on year in the first quarter of 2020, and by around a third for the entire first half, the company estimated. The second-quarter recovery was “tentative,” mainly benefiting established brands and online sales, it added.

In the US, sales dropped about 40% in the second quarter of 2020, and by just under 20% for the first half. There was “evidence of rising sales” among independent jewelers and chains, as well as online, in June and the third quarter, the company continued. Demand in India dropped by more than 30% in the first half, reflecting a slump of nearly 50% during the April-May lockdown.

In 2019, global diamond-jewelry demand increased 0.5% to $79 billion — a weaker growth figure than in previous years as the strong dollar dented sales in China. Demand rose 4% in the US and 3% in Japan, offsetting weaker figures in other markets. The US expanded its share of the polished-diamond market to 48%, from 46% in 2018, while China slipped to 15% from 16%.

The Chinese yuan depreciated against the dollar in 2019 amid a trade war between Beijing and Washington, DC. In local-currency terms, demand from Chinese consumers climbed 1%.

Source: DCLA

De Beers says recovery to Extend – Well Beyond 2020

 

The diamond sector’s rebound from the Covid-19 crisis will feature ups and downs that will continue into next year at least, De Beers predicted.

“The demand recovery is not expected to be linear, particularly as localized lockdowns take place,” De Beers explained Monday in its annual Diamond Insight Report. “Retailer expectations for the second half of the year are mixed, with more optimism in the US but muted sentiments in India and the Far East.”

The pandemic severely hit Chinese demand in the first quarter of this year and US sales in the second quarter, with the recovery likely to “extend well beyond 2020,” the company noted. The impact of Covid-19 on the global economy and the second wave of lockdowns in the fourth quarter have further harmed consumer spending, it added.

“The consequences of these events will determine the short to medium-term outlook,” De Beers added. “However, a weakening US dollar could offset some of the softness in demand in local currencies.”

The pandemic dented the positive trends that were visible at the end of 2019, De Beers said. Diamond-jewelry sales to Chinese consumers slid 45% year on year in the first quarter of 2020, and by around a third for the entire first half, the company estimated. The second-quarter recovery was “tentative,” mainly benefiting established brands and online sales, it added.

In the US, sales dropped about 40% in the second quarter of 2020, and by just under 20% for the first half. There was “evidence of rising sales” among independent jewelers and chains, as well as online, in June and the third quarter, the company continued. Demand in India dropped by more than 30% in the first half, reflecting a slump of nearly 50% during the April-May lockdown.

In 2019, global diamond-jewelry demand increased 0.5% to $79 billion — a weaker growth figure than in previous years as the strong dollar dented sales in China. Demand rose 4% in the US and 3% in Japan, offsetting weaker figures in other markets. The US expanded its share of the polished-diamond market to 48%, from 46% in 2018, while China slipped to 15% from 16%.

The Chinese yuan depreciated against the dollar in 2019 amid a trade war between Beijing and Washington, DC. In local-currency terms, demand from Chinese consumers climbed 1%.

Source: DCLA

WDC Elects Feriel Zerouki as President from 2022

De Beers executive Feriel Zerouki will succeed Edward Asscher as president of the World Diamond Council (WDC) in 2022, the organization said Monday.

Zerouki, De Beers’ senior vice president of international relations and ethical initiatives, will become the first woman to head the WDC, which works to keep conflict diamonds out of the supply chain. Its board confirmed her election as vice president during a virtual meeting on Friday; according to WDC rules, she will automatically become president when Asscher’s current term ends two years from now.

Asscher, president of the Amsterdam-based Royal Asscher Diamond Company, took over at the WDC on Friday, stepping up from his previous position as vice president. He replaces Stephane Fischler, and will be serving his second term at the helm, after holding the role from 2014 to 2016.

The WDC board also confirmed the reelection of Ronnie Vanderlinden, president of the International Diamond Manufacturers Association, as treasurer, and the appointment of Udi Sheintal as secretary.

Source: DCLA

WDC Elects Feriel Zerouki as President from 2022

De Beers executive Feriel Zerouki will succeed Edward Asscher as president of the World Diamond Council (WDC) in 2022, the organization said Monday.

Zerouki, De Beers’ senior vice president of international relations and ethical initiatives, will become the first woman to head the WDC, which works to keep conflict diamonds out of the supply chain. Its board confirmed her election as vice president during a virtual meeting on Friday; according to WDC rules, she will automatically become president when Asscher’s current term ends two years from now.

Asscher, president of the Amsterdam-based Royal Asscher Diamond Company, took over at the WDC on Friday, stepping up from his previous position as vice president. He replaces Stephane Fischler, and will be serving his second term at the helm, after holding the role from 2014 to 2016.

The WDC board also confirmed the reelection of Ronnie Vanderlinden, president of the International Diamond Manufacturers Association, as treasurer, and the appointment of Udi Sheintal as secretary.

Source: DCLA

De Beers Makes Dramatic Cut to Production Plan

De Beers has reduced its full-year production guidance by 7 million carats, putting the miner on course for its lowest output since 2009. 

The miner expects to produce between 25 million and 27 million carats in 2020, compared to the 32 million to 34 million in its original projection, it said Thursday. The revised forecast for 2020 was due to the impact of the COVID-19 pandemic on mining activity and consumer traffic in key markets, the miner noted.

Rough-diamond production for the first quarter of 2020 slipped 1% to 7.8 million carats, roughly in line with the previous year. However, the coronavirus shutdown measures were not implemented at the miner’s sites until the end of the period, and had a limited impact on output, De Beers said.

Sales volume rose 19% to 8.9 million carats for the three months ending March 31. The increase was due to a favorable comparison with the same period the previous year, when demand was weak due to an oversupply of polished stones in the manufacturing sector. Additionally, the decline in demand caused by the pandemic — during which De Beers allowed customers to defer some of their allocations to the second quarter — was offset by higher appetite for lower-value goods, the company noted.

Production in Botswana declined 5% to 5.6 million carats, with diamond recovery at De Beers’ Orapa mine falling 7% as result of challenges in commissioning new plant infrastructure. Output at Jwaneng slipped 4% due to a planned shift to lower-grade ore.

Production in Namibia grew 6% to 511,000 carats, and in South Africa jumped 97% to 751,000 carats, as the final ore from the company’s open-pit operations at Venetia was mined prior to the transition to underground.

Output in Canada slid 19% to 844,000 carats, primarily due to the closure of the Victor mine, which reached its end of life in the second quarter of 2019. Output from Gahcho Kué, which the company owns in partnership with Mountain Province, rose 4% to 844,000 carats.

The first quarter featured two sales cycles, with proceeds falling 9% to $906 million. Demand reached a near-yearlong high in January, but fell again in February as the coronavirus began to spread. The company was forced to cancel its third site, which was due to begin at the end of March.

In 2009, the company slashed production by 49% to 24.6 million carats for the year when the global economic slowdown hit diamond demand. 

Source: DCLA

De Beers Makes Dramatic Cut to Production Plan

De Beers has reduced its full-year production guidance by 7 million carats, putting the miner on course for its lowest output since 2009. 

The miner expects to produce between 25 million and 27 million carats in 2020, compared to the 32 million to 34 million in its original projection, it said Thursday. The revised forecast for 2020 was due to the impact of the COVID-19 pandemic on mining activity and consumer traffic in key markets, the miner noted.

Rough-diamond production for the first quarter of 2020 slipped 1% to 7.8 million carats, roughly in line with the previous year. However, the coronavirus shutdown measures were not implemented at the miner’s sites until the end of the period, and had a limited impact on output, De Beers said.

Sales volume rose 19% to 8.9 million carats for the three months ending March 31. The increase was due to a favorable comparison with the same period the previous year, when demand was weak due to an oversupply of polished stones in the manufacturing sector. Additionally, the decline in demand caused by the pandemic — during which De Beers allowed customers to defer some of their allocations to the second quarter — was offset by higher appetite for lower-value goods, the company noted.

Production in Botswana declined 5% to 5.6 million carats, with diamond recovery at De Beers’ Orapa mine falling 7% as result of challenges in commissioning new plant infrastructure. Output at Jwaneng slipped 4% due to a planned shift to lower-grade ore.

Production in Namibia grew 6% to 511,000 carats, and in South Africa jumped 97% to 751,000 carats, as the final ore from the company’s open-pit operations at Venetia was mined prior to the transition to underground.

Output in Canada slid 19% to 844,000 carats, primarily due to the closure of the Victor mine, which reached its end of life in the second quarter of 2019. Output from Gahcho Kué, which the company owns in partnership with Mountain Province, rose 4% to 844,000 carats.

The first quarter featured two sales cycles, with proceeds falling 9% to $906 million. Demand reached a near-yearlong high in January, but fell again in February as the coronavirus began to spread. The company was forced to cancel its third site, which was due to begin at the end of March.

In 2009, the company slashed production by 49% to 24.6 million carats for the year when the global economic slowdown hit diamond demand. 

Source: DCLA

De Beers Pauses Botswana Mining

De Beers’ mining operations in Botswana have been on hold for more than two weeks amid a national lockdown, the company told Rapaport News.

Debswana, the company’s joint venture with the government, paused activities on April 2 when the coronavirus-related restrictions began, a De Beers spokesperson said Friday. The miner had not previously disclosed its full response to the Botswana lockdown, and will publish an updated production forecast in its operational results this Thursday.

Operations at Debswana are currently limited to essential services, with a small number of staff members still working.

De Beers’ current production outlook for 2020 is 32 million to 34 million carats — a plan that’s been in place since December, when it reduced its guidance due to inventory rebalancing taking place in the industry. It had previously expected to unearth between 33 million and 35 million carats for the year.

Botswana initially instituted a 28-day lockdown, and later extended the state of emergency for six months. Mining has received the status of an essential service, De Beers noted, adding that it was discussing how it could restart operations with health precautions in place.

“Debswana has been engaging with key stakeholders and considering the appropriate recommencement of operations, albeit at a significantly reduced level,” a company spokesperson said.

The country is De Beers’ largest source of rough diamonds, with the Jwaneng and Orapa deposits last year contributing 23.3 million carats of its global output of 30.8 million carats. The pandemic also forced it to cancel its March-April sight in Gaborone, the capital, as buyers were unable to attend or ship goods.

De Beers has also reduced the number of workers at Venetia, its only mine in South Africa, by 75% in response to a lockdown there. In addition, the company has introduced precautions at its Gahcho Kué mine in Canada’s Northwest Territories, including changing workers’ shift patterns to minimize travel.

Source: DCLA

De Beers Pauses Botswana Mining

De Beers’ mining operations in Botswana have been on hold for more than two weeks amid a national lockdown, the company told Rapaport News.

Debswana, the company’s joint venture with the government, paused activities on April 2 when the coronavirus-related restrictions began, a De Beers spokesperson said Friday. The miner had not previously disclosed its full response to the Botswana lockdown, and will publish an updated production forecast in its operational results this Thursday.

Operations at Debswana are currently limited to essential services, with a small number of staff members still working.

De Beers’ current production outlook for 2020 is 32 million to 34 million carats — a plan that’s been in place since December, when it reduced its guidance due to inventory rebalancing taking place in the industry. It had previously expected to unearth between 33 million and 35 million carats for the year.

Botswana initially instituted a 28-day lockdown, and later extended the state of emergency for six months. Mining has received the status of an essential service, De Beers noted, adding that it was discussing how it could restart operations with health precautions in place.

“Debswana has been engaging with key stakeholders and considering the appropriate recommencement of operations, albeit at a significantly reduced level,” a company spokesperson said.

The country is De Beers’ largest source of rough diamonds, with the Jwaneng and Orapa deposits last year contributing 23.3 million carats of its global output of 30.8 million carats. The pandemic also forced it to cancel its March-April sight in Gaborone, the capital, as buyers were unable to attend or ship goods.

De Beers has also reduced the number of workers at Venetia, its only mine in South Africa, by 75% in response to a lockdown there. In addition, the company has introduced precautions at its Gahcho Kué mine in Canada’s Northwest Territories, including changing workers’ shift patterns to minimize travel.

Source: DCLA

De Beers Cancels Upcoming Sight

De Beers has called off this week’s sight in Botswana, citing restrictions resulting from measures to contain the coronavirus.

Lockdowns in Botswana, South Africa and India are prohibiting sightholders from traveling and preventing the shipment of merchandise to clients’ international operations, De Beers said in a statement Monday. The company is letting sightholders defer 100% of their supply allocations to later in the year, as reported by Rapaport News on Thursday.

The miner “will continue to seek innovative ways to meet sightholders’ rough-diamond supply needs in the coming weeks,” it continued.

The sale was due to run from March 30 to April 3 in Gaborone. However, on March 16, Botswana banned entry to visitors from 18 countries, including US, China, India and Belgium — making attendance impossible for most sightholders.

Customers can usually buy De Beers’ rough remotely due to the consistency of the diamond assortments. However, demand is extremely weak as the manufacturing sector in Surat, India, has closed and the US retail market has largely shut down. In addition, the ability to transport goods around the world is limited. Sales were likely to be extremely low, rough-market sources told Rapaport News.

The unprecedented conditions prompted the World Diamond Council (WDC) and six major trade organizations to ask the CEOs of De Beers and Alrosa to consider offering complete flexibility on purchasing obligations. In a March 20 letter, bourses and trade groups in India, Belgium and Israel joined the WDC in urging the miners to treat the situation as a “force majeure” — an unforeseeable circumstance that prevents the fulfilment of a contract.

“With so many companies now down to a fraction of sales, it is imperative to keep the right balance to secure their short-term viability,” the organizations wrote.

Alrosa allowed more flexibility than normal at its March rough sale, enabling customers to defer 60% of their allocations. However, responding to the letter, it emphasized the importance of all industry participants supporting each other.

“COVID-19 is a new challenge for all of us, and it requires the industry from mine to retail to stand together and take joint innovative steps, not avoid them at the expense of others,” Alrosa CEO Sergey Ivanov wrote. “Walking away from mutual obligations is shortsighted.”

Source: DCLA

De Beers Cancels Upcoming Sight

De Beers has called off this week’s sight in Botswana, citing restrictions resulting from measures to contain the coronavirus.

Lockdowns in Botswana, South Africa and India are prohibiting sightholders from traveling and preventing the shipment of merchandise to clients’ international operations, De Beers said in a statement Monday. The company is letting sightholders defer 100% of their supply allocations to later in the year, as reported by Rapaport News on Thursday.

The miner “will continue to seek innovative ways to meet sightholders’ rough-diamond supply needs in the coming weeks,” it continued.

The sale was due to run from March 30 to April 3 in Gaborone. However, on March 16, Botswana banned entry to visitors from 18 countries, including US, China, India and Belgium — making attendance impossible for most sightholders.

Customers can usually buy De Beers’ rough remotely due to the consistency of the diamond assortments. However, demand is extremely weak as the manufacturing sector in Surat, India, has closed and the US retail market has largely shut down. In addition, the ability to transport goods around the world is limited. Sales were likely to be extremely low, rough-market sources told Rapaport News.

The unprecedented conditions prompted the World Diamond Council (WDC) and six major trade organizations to ask the CEOs of De Beers and Alrosa to consider offering complete flexibility on purchasing obligations. In a March 20 letter, bourses and trade groups in India, Belgium and Israel joined the WDC in urging the miners to treat the situation as a “force majeure” — an unforeseeable circumstance that prevents the fulfilment of a contract.

“With so many companies now down to a fraction of sales, it is imperative to keep the right balance to secure their short-term viability,” the organizations wrote.

Alrosa allowed more flexibility than normal at its March rough sale, enabling customers to defer 60% of their allocations. However, responding to the letter, it emphasized the importance of all industry participants supporting each other.

“COVID-19 is a new challenge for all of us, and it requires the industry from mine to retail to stand together and take joint innovative steps, not avoid them at the expense of others,” Alrosa CEO Sergey Ivanov wrote. “Walking away from mutual obligations is shortsighted.”

Source: DCLA

De Beers Reveals Overhaul of Sight System

De Beers plans to split sightholders into three categories and offer each group a more bespoke selection of rough diamonds as part of changes to its sales system.

Manufacturers, dealers and retailers will sign specific supply contracts designed for the “broad needs” of each business model, a De Beers spokesperson told Rapaport News Thursday.

The arrangement will take effect in January 2021, following the end of the current sightholder contract, which runs until December 2020. Applications start this week, giving companies four weeks to complete the process, a source in the rough market said on condition of anonymity.

The manufacturer contract will “support the core strengths” of each cutting firm, De Beers explained. Dealers — those that buy rough for resale — will receive a “regular and consistent range of goods,” especially in higher-volume areas. The retailer contract is tailored for companies that sell jewelry to consumers and also have polishing operations. Beneficiation contracts — for sightholders that commit to polishing certain goods in the country where they were mined — will remain as modified versions of the manufacturing contract.

“It is our ambition to offer supplies and services that can help to better support the unique strengths of the great businesses of the diamond midstream, and we feel this approach is the optimal way of achieving this,” the spokesperson said.

The company has long been contemplating changes to its sightholder system amid difficult conditions in the manufacturing and trading sectors, such as tight liquidity and an inventory imbalance. Its supply rules — based on a method known as “demonstrated demand” — have also faced criticism.

Under that system, De Beers mainly determines clients’ rough supply using their purchasing record — a controversial policy because it can encourage sightholders to take on unprofitable inventory to secure future access to its goods. It offers the diamonds in prearranged boxes that customers either take or leave, with only limited flexibility to adjust the contents. That sometimes forces sightholders to buy items they don’t want just so they can get the stones they need.

The current method has come under particular scrutiny given the excess polished in the market last year, which contributed to a slump in rough demand. Last July, Dutch bank ABN Amro urged its clients to stop buying unprofitable rough, and attacked the practice of making purchases purely to maintain supply allocations.

De Beers’ revenue fell 24% to $4.61 billion in 2019, while underlying earnings slid 87% to $45 million, as the supply glut left sightholders unwilling to buy more rough. The situation forced the miner to allow unprecedented refusals and other concessions to avoid flooding the market with goods.

The “need for us to adapt to the changing world” has been the subject of talks between De Beers and sightholders for a while, the company spokesperson added.

“This new approach to sightholder contracts is one way we are going about this,” he noted.

Source: DCLA