De Beers is considering additional production cuts in response to ongoing weak demand and oversupply in the diamond market.
This potential move follows the miner’s earlier reduction of its 2024 production target by 3 million carats, as the company anticipates a prolonged market recovery.
“We reduced rough-diamond production from De Beers in response to market conditions,” stated Duncan Wanblad, CEO of De Beers’ parent company, Anglo American.
“The diamond market remains challenging, with high midstream inventory levels and an expectation of a protracted recovery. We will continue to assess options for further production cuts.”
In the third quarter ending September 30, De Beers’ production dropped 25% year-over-year to 5.6 million carats, down from 7.4 million carats in 2023.
Production in Botswana saw a 32% decline to 4 million carats due to planned reductions at the Jwaneng mine.
In Namibia, production fell by 14% to 456,000 carats, primarily from marine mining, although higher-grade ore retrieval helped offset the reduction slightly.
South Africa’s output rose by 41% to 513,000 carats with increased activity at the Venetia underground mine, while production in Canada dropped by 11% to 603,000 carats due to lower-grade ore processing.
Sales remained subdued in Q3 as high midstream inventory and sluggish consumer demand, particularly in China, continued to impact the market.
De Beers’ rough-diamond revenue for the quarter totaled $213 million from 2.1 million carats, significantly down from $899 million on 7.4 million carats over the same period last year.
This variance is partly due to the consolidation of sights 7 and 8, whose combined sales will be reflected in Q4.
Despite these challenges, De Beers is holding to its full-year production guidance of 23 million to 26 million carats.
SOURCE:rapaport.com
