De Beers Slashes Output Amid Diamond Glut

RAPAPORT... DeBeers' production dropped in the third quarter as the miner responded to a declinein rough demand that has left it with an inflated stockpile of diamonds. Outputfell 14% to 7.4 million carats for the period amid planned mine closures andthe transition from open-pit to underground mining at its Venetia project inSouth Africa, parent company Anglo American said Tuesday. "We continue to produce to weaker marketdemand due to macroeconomic uncertainty as well as continued midstreamweakness," the miner noted. "Diamond inventory has continued to build duringthe third quarter due to the subdued market conditions. The elevated inventorylevels are not expected to unwind until 2020." DeBeers reduced production across all the countries in which it operates except Botswana,the miner said. In De Beers' South African operations, production fell 60% to 535,000carats due to the lower volumes at Venetia. Production also ceased at the Voorspoed project in theFree State province at the end of last year. Output shrank 7% to 426,000 carats in Namibia following the shutdownof De Beers' Elizabeth Bay land operations in September 2018. However, productionremained flat in Botswana, at 5.7 million carats, with a 22% planned increaseat its Orapa project offset by an 18% decrease at the Jwaneng mine. InCanada, production dropped 34% to 779,000 carats, largely due to the closure of De Beers' Victor operation in Ontario, which reached the end of its lifeearlier this year. Salesvolume jumped 48% year on year to 7.4 million carats, as the company held onemore sight than during the same period a year ago. However, overall roughdemand remained subdued, the miner explained. Inthe first nine months of 2019, the miner produced 23 million carats, down 12%year on year. Its rough-diamond sales remained flat during the period. Image: An employee sorting rough diamonds. (De Beers)