De Beers lifts Q2 production amid strong trading conditions

Diamond miner De Beers’ rough diamond production increased by 3% to nine-million carats in the second quarter of this year, reflecting production increases to meet stronger demand, as well as the contribution from the ramp-up at the joint venture Gahcho Kué mine, in Canada.

De Beers’ Debswana subsidiary, in Botswana, increased its output by 6% year-on-year to 6.3-million carats, in response to stronger trading conditions.

The Jwaneng mine produced three-million carats, representing a 4% year-on-year increase, while output at Orapa increased by 8% year-on-year to 3.3-million carats, owing to a ramp-up of additional processing capacity.

Production at De Beers’ Namdeb subsidiary, in Namibia, increased by 32% year-on-year to 515 00 ct. The higher production was driven by access to consistently higher grades at the land operations and technology-led optimisation of the marine drill fleet.

Production in South Africa, however, decreased by 28% year-on-year to one-million-carats, primarily owing to a period of suspended production at Venetia mine following a fatal incident in March.

In Canada, production increased by 17% to 1.2-million carats owing to the completion of the ramp-up at Gahcho Kué.

Meanwhile, De Beers reported rough sales volumes of ten-million carats from three sales cycles in the second quarter, compared with 5.9-million carats from two sales cycles in the second quarter of 2017.

In addition to the different number of sales cycles over the period, sales volumes benefited from positive sentiment in the midstream following growth in consumer demand for diamond jewellery in late 2017, and a continuing positive outlook.

The average realised rough diamond price increased by 4% to $162/ct in the first half of this year, compared with $156/ct in the first half of 2017, owing to a 1.6% increase in the average rough price index and an improvement in the sales mix that is driven by substantial volumes of lower-value goods that were sold in the first half of 2017, following the Indian demonetisation programme in late 2016.

Excluding this impact, the average value of the production mix was lower in the first half of this year as a higher proportion of lower-value carats was delivered from Orapa and Gahcho Kué.

De Beers’ full-year production guidance remains unchanged at between 34-million and 36-million carats.