Total diamond production at De Beers during the second quarter decreased by 14.4 percent to 7.7 million carats, when compared to the second quarter of 2018, a fall that was attributed largely to a reduction in output at the company’s Debswana subsidiary in Botswana and at De Beers Consolidated Mines in South Africa.
In response to the weaker trading conditions, De Beers has revised its annual 2019 production forecast downwards to about 31 million carats.
PRODUCTION PLUMMETS IN SOUTH AFRICA AND CANADA
According to the De Beers, Debswana’s production second quarter of the year decreased by 9 percent to 5.7 million carats. This, the company stated, was predominantly the result of a 23 percent decrease in production at Botswana’s Orapa mine to 2.5 million carats, following a planned plant shut down brought forward from the second half of 2019. This, the company stated, impacted production in late in the first quarter and early in the second quarter.
But while production at the one Botswana mine fell, it actually rose at the Jwaneng mine by 7 percent to 3.2 million carats. This De Beers said came about because of an increase in the number of tons of ore treated.
A night-time shot of the Venetia min in South Africa, which is approaching a transition from open pit to underground mining.
Production at De Beers Consolidated Mines in South Africa plummeted by 44 percent during the second quarter of 2019 to 0.6 million carats, mainly due to lower mined volumes at the Venetia mine, which is fast approaching a transition from open pit to underground mining.
In addition, output at the Voorspoed mine is South Africa stood at zero, after production stopped during the fourth quarter of 2018, with the facility being placed on care and maintenance in preparation for its planned closure.
In Namibia, production by De Beers subsidiary Namdeb Holdings fell by 35 percent to 0.3 million carats, because of the Elizabeth Bay facility transitioning to care and maintenance during the fourth quarter last year, and planned maintenance for the Mafuta underwater crawler vessel.
In Namibia, production by De Beers subsidiary Namdeb Holdings fell by 35 percent to 0.3 million carats.
Production at De Beers mines in Canada fell because of planned lower grades at the Gahcho Kué mine in the Northwest Territories.
Production at De Beers mines in Canada fell by 9 percent during the April through June period to 1.1 million carats, due to planned lower grades at Gahcho Kué. Production at the Victor mine dwindled by 4 percent to 0.2 million carats, as it reached the end of its life during the second quarter.
LOWER SALES GENERALLY PARALLEL LOWER MINING TOTALS
In line with rough diamond production, sales of rough diamonds fell by 10 percent during the past three sales cycles to about 9 million carats, or 8.3 million carats on a consolidated basis, compared with 10.0 million carats, or 9.4 million carats on a consolidated basis, from the same number of sales cycles during the second quarter of 2018.
De Beers reported that demand for rough diamonds remained subdued as a result of challenges in the midstream, with higher polished inventories and market hesitance that can be attributed to macro-economic uncertainty, including the trade tensions between the United States and China
The average price per carat of rough diamonds sold by De Beers during the first half of the year equaled US$151, down 7 percent from the US$162 per carat during the first six months of last year. This, the company said, was driven by a 4 percent cut in the average rough price index and a change in the sales mix, which was made in response to the weaker market conditions.