- Botswana Diamond Production Slump 19%
- Weak demand from China
The production of rough diamonds at Debswana Diamond Company fell 19 percent during Q2 2024 compared to the prior corresponding period to 4.7 million carats, due to adjustments in processing existing stockpiles at Jwaneng.
However, Anglo is optimistic that production will remain in the 26 and 29 million carats region by the end of the year. The group fears a slow market recovery because of oversupply and weak demand from China.
“We are looking at ways to cut production further to manage our working capital and preserve cash,” Anglo said, announcing that De Beers diamond division will further reduce production.
Duncan Wanblad, Chief Executive of Anglo-American, attributed this decision to reduced spending by Chinese consumers, which has led to a long-term downturn in the market.
According to Anglo America, earlier this year, De Beers had planned a 10 percent production cut, resulting in a 15 percent decline in second-quarter diamond output compared to last year, totalling 6.4 million carats.
In mid-May this year, Anglo shocked the diamond market when it announced plans to cut ties with De Beers.
Wanblad acknowledged the challenging trading conditions for De Beers, citing subdued demand from Chinese consumers and elevated inventory levels faced in the second quarter. He noted that the company is now exploring options to further reduce production due to these high inventory levels.
Diamond production in Namibia decreased by 8 percent to 0.6 million carats. This decline was mainly due to scheduled maintenance on Debmarine Namibia’s mining ships, partially offset by mining higher quality diamonds at Namdeb, according to Anglo American.
In contrast, diamond production in South Africa increased by 8 percent to 0.5 million carats, which is attributed to processing more high-quality underground ore from the Venetia mine as it shifts to underground mining operations, reports Anglo America.
Demand for rough diamonds showed a slight recovery at the beginning of 2024 after the temporary suspension on diamond imports into India was lifted in late 2023, with the United States experiencing improved sales of diamond jewellery during the retail season. However, due to higher-than-usual polished diamond inventory levels and cautious retailer restocking, demand for rough diamonds declined again in the second quarter. Anglo American anticipates a gradual market recovery.
In the second quarter of 2024, De Beers sold 7.8 million carats of rough diamonds, up from 7.6 million carats in the same period last year. This increase came from three selling events, compared to two selling events last year. In the first quarter of 2024, they sold 4.9 million carats from two selling events.
The average price per carat for these diamonds remained stable at $164 in the first half of 2024, similar to last year. This stability reflects the sale of a larger proportion of higher-value rough diamonds, despite a 20 percent drop in the overall average price index for rough diamonds compared to last year.
