De Beers’ Q2 Production Rises 3% to 9 Million Carats, Sales Surge to 10 Million Carats

De Beers’ Q2 Production Rises 3% to 9 Million Carats, Sales Surge to 10 Million Carats

Releasing its production update for the three months ended June 30, 2018, mining conglomerate Anglo American plc said that De Beers had seen a 3% growth in rough diamond production to 9.0 million carats during this period.

Giving further details, De Beers said the rise reflected both production increases to meet stronger demand as well as the contribution from the ramp-up at Gahcho Kué.

The Company said that in Botswana {Debswana) there was a six per cent increase to 6.3 million carats in response to stronger trading conditions. Within this, Jwaneng production increased four per cent to 3.0 million carats due to an increase in tonnes mined and treated, while at Orapa2, production increased eight per cent to 3.3 million carats due to the ramp up of additional processing capacity in response to stronger trading conditions.

In Namibia (Namdeb Holdings), the Company said that production increased 32 per cent to 515,000 carats driven by access to consistently higher grades at the land operations and technology-led optimisation of the marine drill fleet.

The picture was reversed in South Africa (De Beers Consolidated Mines), where production decreased 28 per cent to 1.0 million carats, primarily owing to a period of suspended production at Venetia following a fatal incident in March.

Canada, where De Beers is a partner in the Gahcho Kué mine, reported a 17 per cent rise in production to 1.2 million carats due to the completion of the ramp-up there.

Reporting on sales during this period, De Beers said that rough sales volumes were 10.0 million carats (9.4 million carats on a consolidated basis) from three sales cycles in Q2 2018, compared with 5.9 million carats (5.4 million carats on a consolidated basis) from two sales cycles in Q2 2017.

In addition to the different number of sales cycles over the period, sales volumes benefited from positive sentiment in the midstream following growth in consumer demand for diamond jewellery in late 2017, and a continuing positive outlook, the Company added.

The average realised rough diamond price in the first six months of the year (H1 2018) was up four per cent to US$162/carat (H1 2017: US$156/carat) due to a 1.6 per cent increase in the average rough price index and an improvement in the sales mix, driven by the substantial volumes of lower value goods sold in H1 2017, following the Indian demonetisation programme in late 2016. Excluding this impact, the average value of the production mix was lower in H1 2018 as a higher proportion of lower value carats was delivered from Orapa and Gahcho Kué.

De Beers said that the full year production guidance remains unchanged at 34 to 36 million carats, subject to trading conditions.

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