Why rough diamond sales tumbled at De Beers’ fourth sale
The sale comes after the industry restocked its supplies of rough diamonds following the year-end sales period
De Beers, the largest producer of rough diamonds by value, reported revenue of $520m for the fourth sales event of the year, well below the figure recorded a year earlier.
De Beers, which is 85% owned by Anglo American and one of the diversified miner’s core business units, said its May sales of $520m compared with the $636m it realised in the matching period a year earlier and $586m in the third sale of 2017. "We are continuing to see steady demand for rough diamonds despite the industry entering a typically quieter season," said De Beers CEO Bruce Cleaver.
The sale, the lowest so far in 2017, comes after the industry restocked its supplies of rough diamonds following the year-end sales period.
So far, the 2017 sales amounted to $2.4bn, said JP Morgan Cazenove, adding they represented 43% of its full-year sales forecast.
A year ago, the first four sales of the year represented 47% of the 2016 sales figure, it said.
Earlier in 2017, De Beers flooded its uneconomical Snap Lake mine in Canada, preserving a resource of some 30-million carats.
De Beers and its partner, Canada’s Mountain Province, have brought the Gahcho Kue mine into commercial production in 2017, replacing the
Snap Lake underground mine with a more cost-effective open-cast mine.
De Beers, which tailors production to match market demand, has set its 2017 production target at 31-million to 33-million carats.
The company has a total production capacity of 35-million carats, including its 51% share of diamonds from Gahcho Kue, which has annual production of about 4.5-million carats.