De Beers: Robust demand for rough diamonds continued into Q1
Rough diamond production increased by 25% to 8.9 million carats, reflecting a strong operational performance, and higher planned levels of production to meet continued strong demand for rough diamonds, while Q1 2021 was impacted by particularly high rainfall in Botswana and at Venetia.
In Botswana, production increased by 25% to 6.2 million carats from increased processing at both Orapa and Jwaneng, as well as planned higher grades across the operations.
Namibia production increased by 33% to 0.5 million carats primarily driven by higher recovery from the crawler vessels, due to lower planned maintenance of the Mafuta and the early delivery of the new diamond recovery vessel, the Benguela Gem.
South Africa production increased by 46% to 1.7 million carats due to the treatment of higher grade ore from the final cut of the open pit.
Production in Canada decreased by 15% to 0.6 million carats, primarily as a result of treating lower grade ore.
Robust demand for rough diamonds continued into the first quarter following strong growth in consumer demand over the holiday season, with rough diamond sales totalling 7.9 million carats (7.0 million carats on a consolidated basis) from two Sights, compared with 13.5 million carats (12.7 million carats on a consolidated basis) from three Sights in Q1 2021, and 7.7 million carats (7.2 million carats on a consolidated basis) from three Sights in Q4 2021.
However, as we head into the seasonally slower second quarter of the year, diamond businesses are adopting a more cautious and watchful approach in light of the war in Ukraine and associated sanctions, as well as the impact of Covid-19 lockdowns in China.
2022 GUIDANCE
Production guidance for 2022 is unchanged at 30-33 million carats (100% basis), subject to trading conditions and the extent of further Covid-19 related disruptions. Unit cost guidance for 2022 is unchanged at c.$65/ct.
De Beers Group production is on a 100% basis, except for the Gahcho Kue joint venture which is on an attributable 51% basis. Consolidated sales volumes exclude De Beers Group’s JV partners’ 50% proportionate share of sales to entities outside De Beers Group from the Diamond Trading Company Botswana and the Namibia Diamond Trading Company, which are included in total sales volume (100% basis). Due to ongoing travel restrictions and the timing of Sight 3 at the end of Q1 2021, the Sight event was extended beyond its normal week-long duration. As a result, 0.2 Mct (total sales volume, 100% and consolidated basis) from Sight 3 were recognised in Q2 2021.
