De Beers maintains full-year output guidance, says demand still subdued

Diamond miner De Beers has maintained its full-year production guidance at about 31-million carats, despite subdued demand for rough diamonds.

The company on Tuesday reported that it had sold 7.1-million carats of rough diamonds on a consolidated basis in the third quarter of this year, compared with the five-million carats sold in the third quarter of 2018.

It pointed out, however, that the quarter under review had included three sales cycles, compared with only two in the prior comparable period.

"Rough sales volumes were therefore higher due to an additional sales cycle in the period compared with the previous year; however, overall demand for rough diamonds remains subdued as a result of challenges in the midstream, with higher polished inventories and caution due to macroeconomic uncertainty," it noted.

De Beers, which is led by CEO Bruce Cleaver, meanwhile, reported a 14% year-on-year decrease in third-quarter production to 7.4-million carats as a result of planned reductions in South Africa and Canada, as well as the company maintaining production in line with weaker market demand.

Production in South Africa decreased by 60% year-on-year to 500 000 ct as a result of lower mined volumes at the Venetia mine as it prepares to transition to underground mining and as it excludes production from the Voorspoed mine, which had been placed on care and maintenance in the fourth quarter of 2018.

De Beers' Canadian production also decreased by 34% year-on-year to 800 000 ct, as a result of the closure of the Victor mine in the second quarter.

The miner's Botswana subsidiary, Debswana, produced 5.7-million carats of diamonds in the third quarter – in line with that produced in the third quarter of 2018.

Production by its Namibian subsidiary, Namdeb, decreased by 7% to 400 000 ct, as the Elizabeth Bay land operations were placed on care and maintenance in the fourth quarter of 2018.