De Beers is moving its auctions headquarters from Singapore to Botswana in a move designed to streamline its operations and cut costs.
The UK-based miner sells around 10 per cent of its rough, by value, via online auctions to almost 1,000 registered buyers. The other 90 per cent is sold to sightholders.
In a statement the company said De Beers Group Auctions would pause it operations and sales events in the coming months, while the transition takes place.
Last year De Beers postponed its Cycle 5 and 6 auctions amid dwindling demand from Indian manufacturers and in January it introduced a new online “sealed bid” tender called The Offer for some of its rough diamonds.
Al Cook, De Beers Group CEO, said the move would drive cost efficiencies and support the needs of customers.
Last December Anglo American, parent company of De Beers said the diamond miner would have to cut $100m from its annual overheads in the face of ongoing weak demand.
De Beers moved its Sights from the UK to Gaborone, Botswana, in 2013.
It’s 50 years since the world’s largest octahedral diamond was recovered, and even today it remains uncut, unpolished and unsold.
The 616-carat Type 1 yellow diamond, dates back to 17 April 1974 and comes from the Dutoitspan Mine in Kimberley, South Africa, which opened in the 1870s and closed in 2005.
The miner who found the diamond, De Beers employee Abel Maretela, was rewarded with a large bonus and a house.
Al Cook, De Beers Group CEO, was shown the diamond on a visit to Johannesburg, by Moses Madondo, CEO of De Beers Group managed operations.
“I’m a geologist so I love to learn about the history of diamonds even before they were found,” he said in a LinkedIn post.
“This is a Type 1 diamond which means that it was formed around 150 km below the earth’s surface, deep in the mantle, over 1 billion years ago.
“During the Cretaceous period, about 100 million years ago, a kimberlite volcano brought this diamond up to the earth’s surface. Its beautiful yellow colour comes from nitrogen atoms that were trapped inside the carbon lattice when it was forming in the mantle.”
Industry veteran Stuart Brown, who has led multiple diamond-mining companies, will become chairman of the board at Lucapa Diamond Company.
Brown spent 20 years at De Beers, with stints as both interim CEO and chief financial officer. He was also the head of Firestone Diamonds from 2013 to 2018, and CEO of Mountain Province for three years, Lucapa said Monday.
During his time at Firestone, he raised $225 million to develop the Liqhobong mine in Lesotho, Lucapa noted. He is currently a director of Ukrainian iron-ore miner Ferrexpo and of Digby Wells Environmental Holdings, a provider of environmental, social and governance (ESG) consulting services to the mining industry.
In addition, Ronnie Beevor will take a seat on the board. He has experience in investment banking and mining, having been the head of Rothschild Australia. He is currently a director of Canadian iron-ore miner Champion Iron and Canadian explorer Mount Royal Resources. He serves as chairman of gold explorer Felix Gold and has recently retired as chairman of Bannerman Energy.
Meanwhile, Ross Stanley has resigned from Lucapa’s board, the company added.
New findings hold the potential to spark future diamond discoveries.
An international team of scientists, led by the University of Southampton, has found that the breakup of tectonic plates is the main driving force behind the generation and eruption of diamond-rich magmas from deep inside the Earth.
This insight could significantly influence the trajectory of the diamond exploration industry, guiding efforts to locations where diamonds are most probable.
Diamonds, which form under great pressures at depth, are hundreds of millions, or even billions, of years old. They are typically found in a type of volcanic rock known as kimberlite. Kimberlites are found in the oldest, thickest, strongest parts of continents – most notably in South Africa, home to the diamond rush of the late 19th century. But how and why they got to Earth’s surface has, until now, remained a mystery.
The new research examined the effects of global tectonic forces on these volcanic eruptions spanning the last billion years. The findings have been published in the journal Nature.
Southampton researchers collaborated with colleagues from the University of Birmingham, the University of Potsdam, the GFZ German Research Centre for Geosciences, Portland State University, Macquarie University, the University of Leeds, the University of Florence, and Queen’s University, Ontario.
Tom Gernon, Professor of Earth Science and Principal Research Fellow at the University of Southampton, and lead author of the study, said: “The pattern of diamond eruptions is cyclical, mimicking the rhythm of the supercontinents, which assemble and break up in a repeated pattern over time. But previously we didn’t know what process causes diamonds to suddenly erupt, having spent millions – or billions – of years stashed away 150 kilometers beneath the Earth’s surface.”
To address this question, the team used statistical analysis, including machine learning, to forensically examine the link between continental breakup and kimberlite volcanism. The results showed the eruptions of most kimberlite volcanoes occurred 20 to 30 million years after the tectonic breakup of Earth’s continents.
Dr. Thea Hincks, Senior Research Fellow at the University of Southampton, said: “Using geospatial analysis, we found that kimberlite eruptions tend to gradually migrate from the continental edges to the interiors over time at rates that are consistent across the continents.”
Geological processes
This discovery prompted the scientists to explore what geological process could drive this pattern. They found that the Earth’s mantle – the convecting layer between the crust and core – is disrupted by rifting (or stretching) of the crust, even thousands of kilometers away.
Dr Stephen Jones, Associate Professor in Earth Systems at the University of Birmingham, and study co-author said: “We found that a domino effect can explain how continental breakup leads to the formation of kimberlite magma. During rifting, a small patch of the continental root is disrupted and sinks into the mantle below, triggering a chain of similar flow patterns beneath the nearby continent.”
Dr. Sascha Brune, Head of the Geodynamic Modelling Section at GFZ Potsdam, and a co-author on the study, ran simulations to investigate how this process unfolds. He said: “While sweeping along the continental root, these disruptive flows remove a substantial amount of rock, tens of kilometers thick, from the base of the continental plate.”
The typical migration rates estimated in models matched what the scientists observed from kimberlite records.
“Remarkably, this process brings together the necessary ingredients in the right amounts to trigger just enough melting to generate kimberlites,” added Dr Gernon.
The team’s research could be used to identify the possible locations and timings of past volcanic eruptions tied to this process, offering valuable insights that could enable the discovery of diamond deposits in the future.
Professor Gernon, who was recently awarded a major philanthropic grant from the WoodNext Foundation to study the factors contributing to global cooling over time, said the study also sheds light on how processes deep within the Earth control those at the surface: “Breakup not only reorganizes the mantle, but may also profoundly impact Earth’s surface environment and climate, so diamonds might be just a part of the story.”
Reference: “Rift-induced disruption of cratonic keels drives kimberlite volcanism” by Thomas M. Gernon, Stephen M. Jones, Sascha Brune, Thea K. Hincks, Martin R. Palmer, John C. Schumacher, Rebecca M. Primiceri, Matthew Field, William L. Griffin, Suzanne Y. O’Reilly, Derek Keir, Christopher J. Spencer, Andrew S. Merdith and Anne Glerum, 26 July 2023, Nature.
“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.
A new list names the Jwaneng diamond mine, in Botswana, as the world’s richest diamond mine.
A new list by miningintelligence.com, quoted by IDEX Online, names the Jwaneng diamond mine, in Botswana, as the world’s richest diamond mine for the first three quarters of 2022. Jwaneng produced 10.3 million carats in 2022.
Orapa, also in Botswana, came second with 8 million carats. Both Jwaneng and Orapa are operated by Debswana, a partnership between De Beers and the government of Botswana. Jwaneng and Orapa were also listed as the two highest value diamond mines in the world, estimated at $1.25 billion and $976 million respectively, “based on average historic annualized prices of $121.5 per carat,” according to the report.
Alrrosa’s Udachny mine came third. Although Alrosa has not published production figures since the war with Ukraine, miningintelligence.com bases its conclusion on the mine’s 2021 production of 4.6 million carats. Fourth comes the Venetia mine in South Africa 4.6m carats, operated by De Beers. In fifth is Nyurba, in Russia, with 3.6 million carats, based on 2021 numbers.
De Beers will offer widened concessions to purchasers of larger rough diamonds at its upcoming sight as trading has slowed amid difficult market conditions.
The miner will increase its “buyback” allowance to 20% for 1-carat goods and up at the sale, which begins later this month, industry insiders told Rapaport News this week.
Buybacks are a mechanism enabling sightholders to sell 10% of stones back to De Beers after making their purchases. They are popular among clients when markets are weak, as customers can handpick the least profitable items and hope the miner will offer a good price. For De Beers, they provide a way of promoting sales without reducing prices.
Lockdowns in China and global economic uncertainty have spooked sections of the industry, with De Beers’ move reflecting a split in the market. Companies that usually buy 1-carat and larger rough destined for the Far East have reduced their purchasing, while top US and European brands continue to buy melee, supporting the trade in rough under 0.75 carats, dealers explained. In that context, the miner will maintain its usual 10% buyback allowance for rough under 1 carat.
“People actually did buy a lot [of the larger items] up till June [or] July this year, when they thought China would slowly start opening up again,” a market participant said. “That clearly hasn’t happened, and there are people now sitting on those goods.”
Sightholders are expecting De Beers’ next sales cycle — its ninth of the year — to bring the miner around $400 million after buybacks, compared with $500 million in September. The sight will run from October 31 to November 4. The December sight is also likely to be relatively small as southern African cutting factories shut for the holidays.
The October sight will take place amid the Diwali season in India, for which manufacturers are expected to implement extended production pauses of up to three weeks because of the sluggish market. Many of them have been trying to slash their inventories ahead of the holiday.
“De Beers is not too eager to reduce prices at this stage. I think they want to wait till early 2023 for that,” a sightholder predicted.
De Beers’ revenue rose 24% in the first half of 2022, but the miner gave a more somber outlook for the rest of the year.
“We can only have strong rough sales if that’s also coupled by what’s going on on the polished side,” De Beers chief financial officer Sarah Kuijlaars told Rapaport News on Thursday. “The polished position was very strong in the beginning of the year, but it has leveled off. We have much more caution about the next six months than we’ve had for the previous six months.”
Revenue jumped to $3.6 billion in the first half as strong consumer spending during the 2021 holiday season led to intense restocking in early 2022, parent company Anglo American reported the same day. Underlying earnings gained 84% to $491 million.
Rough sales grew 27% to $3.3 billion from five sights during the period. The remaining revenue relates to other businesses such as the company’s consumer brands and industrial-diamond business.
The miner’s rough-price index, which measures like-for-like prices, rose 28% compared with the same period of 2021. The average selling price for rough surged 58% to $213 per carat, reflecting the market upturn and a shift in the product mix to higher-value goods. Sales volume fell 20% to 15.3 million carats.
The higher average price resulted from the introduction of the new Benguela Gem mining vessel off the Namibian coast, which enabled the extraction of more lucrative stones, Kuijlaars explained. In addition, production at the Venetia deposit in South Africa was focused on the final cut of the open-pit mine, which has a relatively high grade — the number of carats per tonne of ore — and high quality, the executive added.
De Beers’ results painted a complex picture of the market. Last week, the company raised its production plan for the full year in response to strong demand, predicting output of 32 million to 34 million carats. It also noted that the sanctions and boycotts targeting Russian diamonds, as well as growing interest in provenance initiatives, would “underpin” demand for its goods. The sixth sales cycle of the year, which took place earlier this month, brought in proceeds of $630 million — 23% higher than for the equivalent period a year ago.
However, inflation in the US and lockdowns in China have created concerns across the industry.
“This time last year, our operation was coming out of Covid-19 [during which output slumped],” Kuijlaars pointed out. “To stabilize our production has been really important, and that strong production gives us confidence for the full year. That’s our part in delivering reliable supply. As we sell that through, we are very alert to signs of any slowdown in the remaining four sights of the year.”
De Beers’ revenue rose 24% in the first half of 2022, but the miner gave a more somber outlook for the rest of the year.
“We can only have strong rough sales if that’s also coupled by what’s going on on the polished side,” De Beers chief financial officer Sarah Kuijlaars told Rapaport News on Thursday. “The polished position was very strong in the beginning of the year, but it has leveled off. We have much more caution about the next six months than we’ve had for the previous six months.”
Revenue jumped to $3.6 billion in the first half as strong consumer spending during the 2021 holiday season led to intense restocking in early 2022, parent company Anglo American reported the same day. Underlying earnings gained 84% to $491 million.
Rough sales grew 27% to $3.3 billion from five sights during the period. The remaining revenue relates to other businesses such as the company’s consumer brands and industrial-diamond business.
The miner’s rough-price index, which measures like-for-like prices, rose 28% compared with the same period of 2021. The average selling price for rough surged 58% to $213 per carat, reflecting the market upturn and a shift in the product mix to higher-value goods. Sales volume fell 20% to 15.3 million carats.
The higher average price resulted from the introduction of the new Benguela Gem mining vessel off the Namibian coast, which enabled the extraction of more lucrative stones, Kuijlaars explained. In addition, production at the Venetia deposit in South Africa was focused on the final cut of the open-pit mine, which has a relatively high grade — the number of carats per tonne of ore — and high quality, the executive added.
De Beers’ results painted a complex picture of the market. Last week, the company raised its production plan for the full year in response to strong demand, predicting output of 32 million to 34 million carats. It also noted that the sanctions and boycotts targeting Russian diamonds, as well as growing interest in provenance initiatives, would “underpin” demand for its goods. The sixth sales cycle of the year, which took place earlier this month, brought in proceeds of $630 million — 23% higher than for the equivalent period a year ago.
However, inflation in the US and lockdowns in China have created concerns across the industry.
“This time last year, our operation was coming out of Covid-19 [during which output slumped],” Kuijlaars pointed out. “To stabilize our production has been really important, and that strong production gives us confidence for the full year. That’s our part in delivering reliable supply. As we sell that through, we are very alert to signs of any slowdown in the remaining four sights of the year.”
Rough-diamond demand was robust at this week’s De Beers sight despite the ongoing Covid-19 crisis in India, customers reported.
Manufacturers snapped up the limited supply in anticipation of rough shortages, sources told Rapaport News. Sales will still be 10% to 25% lower than the previous cycle in March because of reduced availability, they estimated. That translates to a sight value of $330 million to $400 million.
“People are buying from the miners and the big sources, thinking that there will probably be tenders that will be canceled,” a sightholder said. “There is the perceived idea that there’s going to be a shortage in certain goods. People are as eager to buy rough as they were four weeks ago.”
De Beers is not offering any ex-plan goods — those over and above customers’ prearranged allocations — the sources added. The miner has fewer diamonds available for clients after reducing its inventories during a strong first quarter for the rough trade, when it sold 13.5 million carats against production of 7.2 million carats. It has suffered operational difficulties at some of its Botswana deposits, exacerbated by a temporary shutdown at its Gahcho Kué mine in Canada.
“If De Beers offered 20% more [goods at the sight], I think the market would eat it up,” a rough-sector insider commented.
Less manufacturing
While India’s diamond and jewelry sector has received permission to operate during the country’s several coronavirus wave, manufacturing levels have slumped by between 10% and 50% in the past month. This has resulted from capacity restrictions and absenteeism, with smaller sizes seeing a sharper downturn.
Companies that manufacture larger goods operate in factories with more space for social distancing and are able to retain workers by offering higher pay, a sightholder explained. Many employees who produce smaller stones have left Surat and returned to their hometowns for health reasons.
“My production is down by a little less than 10%, but for people who are in smalls, their production has been severely hit, and is probably down by more than 30%,” said an executive at a large-stone manufacturer.
In line with this, the market for large rough has survived better than the small-stone segment, sources explained.
“Anything in [0.75 carats] or up, it’s in big demand,” a customer noted. “You can sell whatever you want.”
Meanwhile, polished demand has strengthened as companies anticipate lower availability alongside steady retail sales. A backlog at the Gemological Institute of America (GIA) has also affected the supply situation, with the turnaround time standing at around a month for the Mumbai laboratory and a little more in Surat.
“Due to the supply scarcity, people are stocking [up on] some of the goods, so demand is high, and will remain strong for a month or so,” another manufacturer said.
India’s virus outbreak has seen activity shift to other global centers. Many large manufacturers relocated their buying teams to Dubai before travel restrictions went into effect, enabling them to continue obtaining rough for their factories, reported Trans Atlantic Gem Sales (TAGS), a tender house located in the emirate.
New contract
De Beers’ weeklong May sight, its fourth of the year, began on Monday, featuring viewings in Dubai, Antwerp and Tel Aviv. The session is also the first under a new supply contract that came into effect on April 1.
The agreement sees the miner offer proportionately more goods to manufacturers rather than dealers in an effort to limit the reselling of boxes. Sightholders expected sluggish rough trading on the secondary market this month as a result.
Certain assortments have also changed, with 8-grainer (2-carat) rough now forming part of a category of larger stones ranging from 2 carats upward, sightholders noted. The size was previously in a 4- to 8-grainer (1- to 2-carat) box, which will now become 4- to 6-grainers (1 to 1.50 carats).
“This was focused both on responding to sightholders’ commercial needs and ensuring we have the most coherent offering for beneficiation customers,” a De Beers spokesperson said.
Customers forecast stable pricing at the sight following successive increases from December to February.
Rough-diamond demand was robust at this week’s De Beers sight despite the ongoing Covid-19 crisis in India, customers reported.
Manufacturers snapped up the limited supply in anticipation of rough shortages, sources told Rapaport News. Sales will still be 10% to 25% lower than the previous cycle in March because of reduced availability, they estimated. That translates to a sight value of $330 million to $400 million.
“People are buying from the miners and the big sources, thinking that there will probably be tenders that will be canceled,” a sightholder said. “There is the perceived idea that there’s going to be a shortage in certain goods. People are as eager to buy rough as they were four weeks ago.”
De Beers is not offering any ex-plan goods — those over and above customers’ prearranged allocations — the sources added. The miner has fewer diamonds available for clients after reducing its inventories during a strong first quarter for the rough trade, when it sold 13.5 million carats against production of 7.2 million carats. It has suffered operational difficulties at some of its Botswana deposits, exacerbated by a temporary shutdown at its Gahcho Kué mine in Canada.
“If De Beers offered 20% more [goods at the sight], I think the market would eat it up,” a rough-sector insider commented.
Less manufacturing
While India’s diamond and jewelry sector has received permission to operate during the country’s several coronavirus wave, manufacturing levels have slumped by between 10% and 50% in the past month. This has resulted from capacity restrictions and absenteeism, with smaller sizes seeing a sharper downturn.
Companies that manufacture larger goods operate in factories with more space for social distancing and are able to retain workers by offering higher pay, a sightholder explained. Many employees who produce smaller stones have left Surat and returned to their hometowns for health reasons.
“My production is down by a little less than 10%, but for people who are in smalls, their production has been severely hit, and is probably down by more than 30%,” said an executive at a large-stone manufacturer.
In line with this, the market for large rough has survived better than the small-stone segment, sources explained.
“Anything in [0.75 carats] or up, it’s in big demand,” a customer noted. “You can sell whatever you want.”
Meanwhile, polished demand has strengthened as companies anticipate lower availability alongside steady retail sales. A backlog at the Gemological Institute of America (GIA) has also affected the supply situation, with the turnaround time standing at around a month for the Mumbai laboratory and a little more in Surat.
“Due to the supply scarcity, people are stocking [up on] some of the goods, so demand is high, and will remain strong for a month or so,” another manufacturer said.
India’s virus outbreak has seen activity shift to other global centers. Many large manufacturers relocated their buying teams to Dubai before travel restrictions went into effect, enabling them to continue obtaining rough for their factories, reported Trans Atlantic Gem Sales (TAGS), a tender house located in the emirate.
New contract
De Beers’ weeklong May sight, its fourth of the year, began on Monday, featuring viewings in Dubai, Antwerp and Tel Aviv. The session is also the first under a new supply contract that came into effect on April 1.
The agreement sees the miner offer proportionately more goods to manufacturers rather than dealers in an effort to limit the reselling of boxes. Sightholders expected sluggish rough trading on the secondary market this month as a result.
Certain assortments have also changed, with 8-grainer (2-carat) rough now forming part of a category of larger stones ranging from 2 carats upward, sightholders noted. The size was previously in a 4- to 8-grainer (1- to 2-carat) box, which will now become 4- to 6-grainers (1 to 1.50 carats).
“This was focused both on responding to sightholders’ commercial needs and ensuring we have the most coherent offering for beneficiation customers,” a De Beers spokesperson said.
Customers forecast stable pricing at the sight following successive increases from December to February.
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.
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.
De Beers, the world’s largest diamond producer by value, said on Wednesday that its latest sale of roughs yielded 40% more revenue than the seventh cycle, which already was more successful than the previous event.
The Anglo American unit, which sells diamonds to a handpicked group of about 80 buyers 10 times a year at events called “sights”, sold $467 million worth of rough diamonds in the eighth cycle, compared to $320 in the previous one.
The results bring De Beers’ total revenue from rough diamonds in the second half of 2020 to more than $900 million.
De Beers’ chief executive Bruce Cleaver said that while the demand increase was encouraging, it was too early to be sure of a sustained recovery in trading conditions.
“We continue to see a steady improvement in demand for rough diamonds in the eighth sales cycle of the year, with cutters and polishers increasing their purchases as retail orders come through ahead of the key holiday season,” Cleaver said in the statement.
The strong figures are further evidence of improving demand for rough diamonds, according to said BMO analyst Edward Sterck. He warned, however, that there is a significant accumulation of upstream diamond inventories, which could suppress the recovery if liquidated too soon and too quickly.
“Maintaining good diamond prices through the recovery will depend upon the pace at which the inventory is unwound, with De Beers and Alrosa holding the keys to the bulk of this inventory,” Sterck wrote in a note to investors.
The analyst also said the fact De Beers only provided a revenue figure meant it was unable to gauge how prices were trending.
Lower prices, more flexibility De Beers has continued to implement a more flexible approach to sales during the sixth and seventh sales cycles of the year, as a result of restrictions triggered by the pandemic.
The usual week-long sight holder events have been extended towards near-continuous sales.
It has also cut prices of its stones, sometimes by almost 10% for larger diamonds, in an effort to spark sales.
Before the price reduction, De Beers had made major concessions to their normal sales rules — allowing customers to renege on contracts and view diamonds in alternative locations.
Along with Russia’s Alrosa, the world’s top diamond producer by output, it has also axed supply of roughs to the market, but built up their own stockpiles.
The diamond giant noted that despite ongoing efforts, it expected it would take “some time” to get back to pre-pandemic levels of demand.
De Beers and Alrosa’s view is shared by many in the industry. India, which polishes about 90% of the world’s rough diamonds, expect the slump in exports to be worse this year than in 2008.
Colin Shah, chairman of the Gem & Jewellery Export Promotion Council, told Bloomberg News on Wednesday that overseas sales of cut and polished diamonds may slump 20% to 25% in the year ending March from $18.66 billion last year.
De Beers, the world’s largest diamond producer by value, said on Wednesday that its latest sale of roughs yielded 40% more revenue than the seventh cycle, which already was more successful than the previous event.
The Anglo American unit, which sells diamonds to a handpicked group of about 80 buyers 10 times a year at events called “sights”, sold $467 million worth of rough diamonds in the eighth cycle, compared to $320 in the previous one.
The results bring De Beers’ total revenue from rough diamonds in the second half of 2020 to more than $900 million.
De Beers’ chief executive Bruce Cleaver said that while the demand increase was encouraging, it was too early to be sure of a sustained recovery in trading conditions.
“We continue to see a steady improvement in demand for rough diamonds in the eighth sales cycle of the year, with cutters and polishers increasing their purchases as retail orders come through ahead of the key holiday season,” Cleaver said in the statement.
The strong figures are further evidence of improving demand for rough diamonds, according to said BMO analyst Edward Sterck. He warned, however, that there is a significant accumulation of upstream diamond inventories, which could suppress the recovery if liquidated too soon and too quickly.
“Maintaining good diamond prices through the recovery will depend upon the pace at which the inventory is unwound, with De Beers and Alrosa holding the keys to the bulk of this inventory,” Sterck wrote in a note to investors.
The analyst also said the fact De Beers only provided a revenue figure meant it was unable to gauge how prices were trending.
Lower prices, more flexibility De Beers has continued to implement a more flexible approach to sales during the sixth and seventh sales cycles of the year, as a result of restrictions triggered by the pandemic.
The usual week-long sight holder events have been extended towards near-continuous sales.
It has also cut prices of its stones, sometimes by almost 10% for larger diamonds, in an effort to spark sales.
Before the price reduction, De Beers had made major concessions to their normal sales rules — allowing customers to renege on contracts and view diamonds in alternative locations.
Along with Russia’s Alrosa, the world’s top diamond producer by output, it has also axed supply of roughs to the market, but built up their own stockpiles.
The diamond giant noted that despite ongoing efforts, it expected it would take “some time” to get back to pre-pandemic levels of demand.
De Beers and Alrosa’s view is shared by many in the industry. India, which polishes about 90% of the world’s rough diamonds, expect the slump in exports to be worse this year than in 2008.
Colin Shah, chairman of the Gem & Jewellery Export Promotion Council, told Bloomberg News on Wednesday that overseas sales of cut and polished diamonds may slump 20% to 25% in the year ending March from $18.66 billion last year.
Financially troubled Petra Diamonds, which owns three diamond mines in South Africa and one in Tanzania, is putting itself up for sale.
Founded in 1997, Petra owns the Finsch, Cullinan, and Koffiefontein mines in South Africa, as well as the Williamson mine in Tanzania, which is currently under care and maintenance. All those properties were purchased from their original owner, De Beers.
Bidders can express interest in all or part of its assets. Rothschild & Co. is acting as strategic adviser of the transaction. So far, no offers have been received.
In March, the company launched a strategic review of its finances, particularly looking at the $650 million outstanding 7.25% senior secured notes that are due for repayment on May 1, 2022.
In its most recent financial results, for the third quarter ending March 31, revenue fell 32%, due in part to weak sales at its March tender, which was affected by the COVID-19 pandemic.
Petra is not the only miner having trouble in the age of COVID-19. In April, Dominion Diamond filed for insolvency protection in Canada.
Financially troubled Petra Diamonds, which owns three diamond mines in South Africa and one in Tanzania, is putting itself up for sale.
Founded in 1997, Petra owns the Finsch, Cullinan, and Koffiefontein mines in South Africa, as well as the Williamson mine in Tanzania, which is currently under care and maintenance. All those properties were purchased from their original owner, De Beers.
Bidders can express interest in all or part of its assets. Rothschild & Co. is acting as strategic adviser of the transaction. So far, no offers have been received.
In March, the company launched a strategic review of its finances, particularly looking at the $650 million outstanding 7.25% senior secured notes that are due for repayment on May 1, 2022.
In its most recent financial results, for the third quarter ending March 31, revenue fell 32%, due in part to weak sales at its March tender, which was affected by the COVID-19 pandemic.
Petra is not the only miner having trouble in the age of COVID-19. In April, Dominion Diamond filed for insolvency protection in Canada.
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.
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.
