De Beers’ diamond output drops after slow recovery triggers production cut

Diamond output for De Beers slumped 23 per cent in the first quarter, as production was cut in response to a slow recovery in demand amid a pullback in luxury spending and the proliferation of lab-grown equivalents.

De Beers was the only unit of Anglo American to adjust its full-year production forecast on Tuesday, reducing its guided range to 26mn to 29mn carats of output, from 29mn to 32mn, and lifting expected average costs to $90 per carat, from $80.

Anglo American said the diamond market was suffering from a price rout caused by excess piles of inventory, something that De Beers has previously acknowledged is partly down to lab-grown diamonds cannibalising demand for mined stones.

“Ongoing uncertainty around economic growth prospects has led to a continued cautious purchasing approach” by its customers, Anglo American said. “The recovery in rough diamond demand is expected to be gradual through the rest of the year,” it added.

De Beers said a nascent recovery had begun in the first quarter, buoyed by improved demand for diamond jewellery around Christmas and new year in the US.

Diamond producers including De Beers’ arch-rival, Russia’s Alrosa, tried to curb the flow of gemstones into the market in the second half of last year. The Indian government even put on a voluntary import moratorium on rough stones in the final quarter to protect its polishers and cutters.

Despite those continued efforts into this year, demand, prices and the market recovery remains sluggish, Anglo said, requiring further action to be taken to reduce supply.

Anglo American chief executive Duncan Wanblad has been under pressure to improve performance since a production downgrade in December sent shares tumbling, although it has been aided by higher commodity prices, especially for copper.

Wanblad has said that “nothing is off the table” when it comes to asset sales or other options to restructure units, of which De Beers and the platinum group metals division are the most troubled.

“We are progressing through our asset review to optimise value by simplifying and improving the overall quality of the portfolio,” he said in a statement in the first-quarter production update on Tuesday.

Shares in Anglo American dropped 1.7 per cent in early trading in London and remain about a third lower than they were at the start of 2023.

Besides diamonds, the London-based company managed to maintain its guidance across its other commodities such as copper, iron ore and steelmaking coal.

Copper output jumped 11 per cent to 198,100 tonnes, helped by record throughput at its Quellaveco mine in Peru and higher grades at its Chilean mines Collahuasi and El Soldado.

South Africa, where Anglo American has iron ore, steelmaking coal and platinum mines, has become an increasing drag on production because of crippling problems in the logistics and power sector. Rail constraints resulted in a 2 per cent drop in output at Kumba Iron Ore.

Source: DCLA

Lucapa sells three diamonds for $10.5m in first tender

 Lucapa sells three diamonds for $10.5m in first tender

A 203 ct Type IIa diamond as part of Lucapa’s first Lulo tender of the year

Lucapa Diamond Company has sold three exceptional diamonds recovered from the Lulo mine, in Angola, for $10.5-million at tender.

The tender was concluded on April 19 and was conducted by Sodiam, in Luanda.

The three Type IIa white diamonds, weighing 203 ct, 116 ct and 43 ct, made up Lucapa’s first tender of Lulo diamonds for this year.

The total parcel, weighing 361 ct, realised an average price of $29 000/ct.

Lucapa has a 40% interest in the Lulo alluvial mine, alongside Angola’s national diamond company Endiama and a private entity called Rosas & Petalas.

Source: DCLA

The 616 Diamond – Still Uncut and Unsold after 50 Years

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.”

Pics courtesy De Beers.

Source: DCLA

Swiss Watch Exports Plunge Amid Halt in Asia Demand

Swiss watch exports recorded a steep decline in March as demand in China and Hong Kong dipped below that of four years ago, during the height of the pandemic.

Shipments of timepieces slid 16% to CHF 2 billion ($2.2 billion) for the month, the Federation of the Swiss Watch Industry reported Thursday. The downturn followed a 3.8% fall in February, the first drop in more than two years, as appetite began to falter in Asia.

“Swiss watch exports recorded a sharp decline in March,” the federation noted. “China and Hong Kong accounted for a particularly high proportion of the trend. China suffered a decline…dropping to a level below that of March 2020, when the sector practically came to a halt in the middle of the month because of the Covid-19 pandemic. Hong Kong…saw a similar change.”

Supply to the US fell 7% to CHF 340.5 million ($374.5 million). In China, the federation’s second-largest market, shipments plunged 42% to CHF 150.2 million ($165.2 million), and in Hong Kong they plummeted 44% to CHF 148.1 million ($162.9 million). In Japan exports saw a 3.5% drop, while they slipped 3.6% in the United Arab Emirates (UAE). Decreases of 15% in Singapore, 13% in the UK and Germany, and 12% in France were closer to the global average, the federation explained.

Timepieces at each price point noted decreases. Watches that cost less than CHF 200 ($220) fell 19%, as did those priced between CHF 200 and CHF 500 ($550). Watches valued at CHF 500 to CHF 3,000 ($3,300) slid 38%, while those worth over CHF 3,000 decreased 10%.

For the first quarter of the year, exports went down 6% to CHF 6.08 billion ($6.69 billion).

Source: DCLA

Petra’s Prices Boosted $8.2m Blue

Petra Diamonds sold fewer carats but achieved higher prices earlier this month at its fifth tender of FY 2024, boosted by the sale of an $8.2m blue diamond.

The UK-based miner achieved an average $136 per carat on sales of 362,000 carats for $49m.

Like-for-like figures for its fourth tender, in February, were $112 per carat on sales of 429,000 carats for $48m.

Sales for the year to date are, however, lagging behind FY 2023, at $285m, down 10 per cent down on $316m.

The 14.76ct exceptional color and clarity blue diamond recovered from Cullinan, South Africa, sold for $8.2m, although it was not classified as an “exceptional stone” (over $15m).

Total revenue for Q3 FY 2024 was $66m, down 27 per cent on the previous quarter, due to the lower production and the timing of receipts from the fifth tender.

“Production for the quarter is consistent with the preceding quarter and in-line with expectations.,” said CEO Richard Duffy.

Production guidance for FY 2024 is 2.75m to 2.85m carats.

Earlier this month Petra announced the sale of its loss-making Koffiefontein mine, in South Africa, to Dubai-based Stargems for a nominal sum.

Source: DCLA

US Retail Sales Slow Slightly in March

March US retail sales increased at a slower pace than the previous month’s as inflation eased and the job market improved.

Revenue grew 0.7% from the month before to $709.6 billion — adjusted for seasonal variation — compared to an increase of 0.9% in February, according to data the US Census Bureau released Monday.

“As inflation for goods levels off, March’s data demonstrates steady spending by value-focused consumers who continue to benefit from a strong labor market and real wage gains,” said National Retail Federation (NRF) CEO Matthew Shay. “In this highly competitive market, retailers are having to keep prices as low as possible to meet the demand of consumers looking to stretch their family budgets.”

Sales climbed 2.7% from a year earlier, on par with February’s year-on-year results, the NRF added.

March sales were up year on year in six of the nine retail categories the NRF monitors, compared to eight last month. Sales in the clothing and accessories segment — which includes jewelry — were flat compared to February, but advanced 2.1% versus the same period a year ago. Online sales saw the largest year-on-year gain, rising 15%, while electronics, furniture, and building and garden supply products fell.

Source: DCLA

Sotheby’s Jewelry Watch Auction Sells Out in Under an Hour

All 24 items on offer at the first gender-free live auction of bejeweled and embellished vintage timepieces at Sotheby’s found buyers, with the entire group selling in less than an hour.

The top item at the sale, called Rough Diamonds, was a Patek Philippe Ref. 3290 bracelet watch, ring and necklace set, created in 1962 by Gilbert Albert, decorated with enamel and pearls. The set sparked a more than six-minute battle between seven bidders, finally selling for CHF 393,700 ($435,727), over seven times its high estimate, Sotheby’s said Friday.

In total, the April 11 auction garnered CHF 1.2 million ($1.3 million), nearly twice its upper presale price.

“Rough Diamonds was born from the desire to bring to market a concept watch sale that truly resonated with collectors,” said Josh Pullan, global head of Sotheby’s luxury division. “The results of tonight’s sale, with all 24 lots selling to such a diverse and enthusiastic group of buyers, has validated that vision. The fact that the Gilbert Albert-designed Patek Philippe — the most idiosyncratic and extravagant lot in the sale — has become the most valuable lot sold tonight proves that there is a definite appetite amongst buyers for nonconformist and boldly eccentric timepieces, presented in a differentiated context.”

Other items that performed well included two Audemars Piguet watches. The first, a Cobra Royal Khanjar from 1985, brought in CHF 165,100 ($182,724), while a car-shaped white gold, diamond and emerald-set wristwatch from 1995 fetched CHF 107,950 ($119,474). Both pieces smashed their high estimates. Meanwhile, a Patek Philippe bangle watch from 1976 more than doubled its upper price tag, going for CHF 63,500 ($70,279).

Source: DCLA