Sanctions on Russian rough diamonds proved to be De Beers’ windfall, with the mining company reporting that its production increased by 6 percent to 8.2 million carats for the fourth quarter of 2022, when compared to the same period in 2022.
In explaining the increase, De Beers did not state that the obvious, being that it was able to push production to offset a shortfall in the market because of fewer Russian goods being available. Instead, De Beers cited strong operational performance across its assets, although that it reported that was moderated by the planned completion of the final cut at the Venetia open-pit mine.
Production at De Beers Botswana mines rose by 11 percent to 5.8 million carats, driven by strong plant performance, especially at Jwaneng.
Production in South Africa, which is dominated by Venetia, fell 27 percent year-on-year to 900,000 carats, because of the previously announced planned completion of the final cut at Venetia openpit. Open-pit mining at the facility in the northeast of the country came to an end in December, and its will transition to underground operations during the course of 2023.
Production in Namibia climbed by 51 percent to 600,000 carats, primarily driven by the continued strong performance from the Benguela Gem vessel and the treatment of higher-grade ore at the land operations.
De Beers production in Canada rose by 7 percent to 800,000 carats, with the treatment of higher-grade ore being cited as responsible.
De Beers has set its production guidance for 2023 at between 30 million and 33 million carats.
With its tenth package of sanctions against Russia soon to be announced, the European Union is reportedly considering rough diamonds to the mix.
EU TO POSSIBLY RETHINK IMPOSING SANCTIONS
To date, it is almost solely sanctions imposed by the United States against Russian diamond miners Alrosa and several key officials that have suppressed that country’s sales on the world market. But that could be about to change, with the European Union apparently considering once again whether it should add its weight to the effort.
Since the start of the Russian invasion of Ukraine on February 24, 2022, the EU has agreed to nine different packages of sanctions, covering imports of a range of Russian products from coal, gas and steel to caviar and vodka. But notably diamonds have remained off the list.
But a tenth package of sanctions will soon come into effect, and during recent negotiations 26 of the 27 EU members agreed that Alrosa-produced diamonds should no longer be imported into the common market. Indeed, the single country holding up a decision to this effect appears to be Belgium.
A ban on imports from Russian diamond producer Alrosa into Europe has earlier been proposed, as part of its eighth package of sanctions ,but the measure was removed at the last minute.
Concerned that it could lose ground to ground to countries like India and the United Arab Emirates, neither of which has imposed diamond-related sanctions on Russia, Belgium has not said it is against a ban of Russian diamonds in principle, but that any such move should be part of international embargo
“The revenue for Russia from diamonds can only stop if the access of Russian diamonds to Western markets is no longer possible.,” Prime Minister Alexander De Croo said to local media
ALL RUSSIAN ROUGH SHOULD BE SANCTIONED
One prominent official who is calling on the European Union to imposed a more comprehensive ban is Eira Thomas, chief executive of the Canadian mining group Lucara Diamonds. Speaking to the Financial Times, she said that her personal view was that all diamonds of Russian origin “should be sanctioned.”
“The conversation [about sanctions] goes well beyond Antwerp when you think about the whole supply chain in India. I think it’s a more complex narrative than simply Antwerp doesn’t want to sanction diamonds,” Thomas stated.
Thomas admits that the diamond sector, inadvertently, has been a beneficiary of the U.S. sanctions regime, especially when new mine supply is at multi-decade lows.
“This is the best diamond market we’ve seen in the better part of a decade,” Thomas stated
Eira Thomas, Chief Executive of Lucara Diamonds, has voiced her supports for industry-wide sanctions against Russia.