SourcingJul 24, 2023
2 More Miners Note Softness in Rough Diamond MarketSourcingJul 28, 2023
De Beers’ Profit Drops in First Half
Production and total sale volumes were both flat from the year prior.
De Beers’ first-half report reiterated sightholders’ cautious behavior amid softening in consumer demand.
London—Following a slow start to the year, De Beers’ half-year 2023 report shows the total rough diamond sale volume of 15.3 million carats was in line with the previous year.
Despite that, revenue fell 21 percent to $2.8 billion from the previous year’s $3.6 billion. The decline comes amid months of weak customer demand, low average selling price, and increased expenses.
Average diamond price decreased 23 percent to $163 per carat from $213 per carat in 2022, due to the increase in lower-value diamonds sold in 2023.
Demand for rough was impacted by continuous macroeconomic headwinds and high levels of polished-diamond inventory in the midstream coming into 2023, according to the company.
The average rough diamond price index also decreased by 2 percent, reflecting softening in consumer demand for diamond jewelry and the previously mentioned build-up in rough diamond inventory.
Rough diamond production was fairly flat at 16.5 million carats, compared to last year’s first-half production at 16.9 million carats.
The first-half production numbers reflected strong performance in three of the countries where De Beers operates, Botswana, Namibia, and Canada, offset by reductions in South Africa due to the transition of the Venetia open pit.
In South Africa, production decreased by 59 percent to 1.2 million carats from 9 million carats in 2022.
The country’s only mine, the Venetia open pit, closed at the end of 2022. Workers continue to process lower-grade surface stockpiles as it transitions to underground operations, where De Beers said first production was recently achieved. The company said production will ramp up over the next few years.
De Beers began the process of taking Venetia underground in 2013, a $2 billion project expected to extend the life of the mine to 2046 and produce around 94 million carats.
The Venetia project, along with other continued life-extension projects, led to a capital expenditure increase of $302 million, up 21 percent from $250 million in June of last year, per the first-half report.
Diamond production in Botswana, which accounts for more than 75 percent of De Beers’ total production, was at 12.7 million carats, a 9 percent increase from the 11.7 million carats produced in 2022.
The increase was driven by planned treatment of higher-grade ore at the Orapa mine, De Beers said.
De Beers Group and the government of Botswana have also reached a new sales agreement in the years-long renegotiation of the agreement that expired at the end of 2020. Following numerous extensions of the current contract, the new agreement for the country’s rough diamond production now extends to 2033 while the mining licenses for Debswana, the mining company operated jointly by De Beers and the government, now extend to 2054.
In Namibia, production was up 21 percent to 1.2 million carats compared to 1 million carats in the first half of 2022. The increase was driven by continued output from the Benguela Gem, the new marine mining vessel that commenced production in March 2022. The company said the rise is also due in part to ongoing expansion of the mining area at the land operations.
Canadian production was up 9 percent to 1.4 million carats from 1.2 million carats in 2022 as the treatment of higher-grade ore offset planned plant maintenance, De Beers said.
Production guidance for the year remains 30 million to 33 million carats, down from the 34 million carats it mined in 2022.
Related stories will be right here …
Despite that, revenue fell 21 percent to $2.8 billion from the previous year’s $3.6 billion. The decline comes amid months of weak customer demand, low average selling price, and increased expenses.
Average diamond price decreased 23 percent to $163 per carat from $213 per carat in 2022, due to the increase in lower-value diamonds sold in 2023.
Demand for rough was impacted by continuous macroeconomic headwinds and high levels of polished-diamond inventory in the midstream coming into 2023, according to the company.
The average rough diamond price index also decreased by 2 percent, reflecting softening in consumer demand for diamond jewelry and the previously mentioned build-up in rough diamond inventory.
Rough diamond production was fairly flat at 16.5 million carats, compared to last year’s first-half production at 16.9 million carats.
The first-half production numbers reflected strong performance in three of the countries where De Beers operates, Botswana, Namibia, and Canada, offset by reductions in South Africa due to the transition of the Venetia open pit.
In South Africa, production decreased by 59 percent to 1.2 million carats from 9 million carats in 2022.
The country’s only mine, the Venetia open pit, closed at the end of 2022. Workers continue to process lower-grade surface stockpiles as it transitions to underground operations, where De Beers said first production was recently achieved. The company said production will ramp up over the next few years.
De Beers began the process of taking Venetia underground in 2013, a $2 billion project expected to extend the life of the mine to 2046 and produce around 94 million carats.
The Venetia project, along with other continued life-extension projects, led to a capital expenditure increase of $302 million, up 21 percent from $250 million in June of last year, per the first-half report.
Diamond production in Botswana, which accounts for more than 75 percent of De Beers’ total production, was at 12.7 million carats, a 9 percent increase from the 11.7 million carats produced in 2022.
The increase was driven by planned treatment of higher-grade ore at the Orapa mine, De Beers said.
De Beers Group and the government of Botswana have also reached a new sales agreement in the years-long renegotiation of the agreement that expired at the end of 2020. Following numerous extensions of the current contract, the new agreement for the country’s rough diamond production now extends to 2033 while the mining licenses for Debswana, the mining company operated jointly by De Beers and the government, now extend to 2054.
In Namibia, production was up 21 percent to 1.2 million carats compared to 1 million carats in the first half of 2022. The increase was driven by continued output from the Benguela Gem, the new marine mining vessel that commenced production in March 2022. The company said the rise is also due in part to ongoing expansion of the mining area at the land operations.
Canadian production was up 9 percent to 1.4 million carats from 1.2 million carats in 2022 as the treatment of higher-grade ore offset planned plant maintenance, De Beers said.
Production guidance for the year remains 30 million to 33 million carats, down from the 34 million carats it mined in 2022.
In response to a general slowdown in demand, De Beers combined the auctions for its fifth and sixth sales cycles.
In the sixth sales cycle, rough diamond sales slid again from $456 million in the fifth sales cycle (revised from a preliminary $450 million estimate) to a provisional $410 million estimate.
De Beers said demand for branded diamond jewelry remains strong and De Beers Jewellers had a "solid first-half performance, with double-digit growth in bridal and collections.”
The company also said it continues to focus on developing the brand in China. A lack of Chinese demand in the first half due to a wave of Covid-19 infections that impacted consumer behavior negatively affected De Beers’ H1 figures.
CEO Al Cook said that by third-cycle sales, the company was seeing “signs of recovery in consumer confidence following the relaxation of travel restrictions.”
Though short-term challenges remain, the company said consumer desire for natural diamonds will remain robust in key markets long-term, although supply of rough diamonds is expected to decline.
The company sees potential for stakeholders and retailers’ focus on the importance of diamond provenance to reinforce demand for rough diamonds.
De Beers announced last month that the Tracr™ blockchain platform, which tracks a diamond’s journey from the source, would open to diamond industry participants.
The company said the “immutable data” Tracr provides will underpin consumer confidence in natural diamonds and their provenance.
The company also said it continues to focus on developing the brand in China. A lack of Chinese demand in the first half due to a wave of Covid-19 infections that impacted consumer behavior negatively affected De Beers’ H1 figures.
CEO Al Cook said that by third-cycle sales, the company was seeing “signs of recovery in consumer confidence following the relaxation of travel restrictions.”
Though short-term challenges remain, the company said consumer desire for natural diamonds will remain robust in key markets long-term, although supply of rough diamonds is expected to decline.
The company sees potential for stakeholders and retailers’ focus on the importance of diamond provenance to reinforce demand for rough diamonds.
De Beers announced last month that the Tracr™ blockchain platform, which tracks a diamond’s journey from the source, would open to diamond industry participants.
The company said the “immutable data” Tracr provides will underpin consumer confidence in natural diamonds and their provenance.
More on Sourcing
The Latest
MajorsDec 24, 2024
Nordstrom Family, Partner to Take Retailer Private in $6B DealMembers of the founding family have partnered with Mexican retail company El Puerto de Liverpool to acquire Nordstrom.
MajorsDec 24, 2024
Boucheron Bets on Las VegasThe brand has opened its second U.S. location in the Fontainebleau resort and casino.
EditorsDec 24, 2024
The Spectrum Jewels I Want to Find Under the Tree Associate Editor Lauren McLemore highlights pieces from the AGTA Spectrum & Cutting Edge Awards she’d be thrilled to unwrap on Christmas.
Brought to you by
A Diamond Is Forever Celebrates "Forever Present" Holiday CampaignA Diamond is Forever hosted a holiday celebration in honor of their new marketing campaign, ‘Forever Present.’
IndependentsDec 23, 2024
Philadelphia 76ers’ Tyrese Maxey Stars in The 1916 Company’s New CampaignThe retailer’s “On the Clock” campaign celebrates how time, precision, and purpose come together.
Weekly QuizDec 19, 2024
This Week’s QuizTest your jewelry news knowledge by answering these questions.
EditorsDec 23, 2024
My Favorite Piece of the Week Jewels of 2024Associate Editor Natalie Francisco chose her 12 favorite Piece of the Week picks from the year gone by.
GradingDec 23, 2024
GIA Adds Filler Identification to Emerald ReportsLab clients have the option to request this addition on their emerald reports.
Brought to you by
De Beers Group Launches Holiday Campaign for Natural Diamonds‘Forever Present’ campaign revives the iconic A Diamond is Forever tagline and celebrates the diamond dream.
Events & AwardsDec 20, 2024
Two Participants Complete Inaugural Ella Klein InternshipJamie Dunton and Gabriella Botelho are the first graduates of the program, created by the WJA Foundation and Julius Klein Diamonds.
CollectionsDec 20, 2024
Piece of the Week: Retrouvaí’s Ring for CharityIn the spirit of giving, Retrouvaí will donate $4,000 from the sale of this ring to the Los Angeles Regional Food Bank.
IndependentsDec 19, 2024
Michigan’s DeVries Jewelers Unveils New Location in Time for the HolidaysCo-owner Dan DeVries shared what it’s like moving into a space triple the size of its old store and how it feels to be a “real jeweler” now.
CollectionsDec 19, 2024
State Property Transforms Spain’s Generalife Gardens into JewelryAlong with the latest “Gardens” collection, the brand has released limited-edition designs offering more indulgent pieces.
CrimeDec 19, 2024
Alleged Jewelry Thieves Attempt Rowboat EscapeThe man and woman are accused of stealing jewelry from a shipping container then trying to flee by paddling a small boat out into a bay.
SourcingDec 19, 2024
Gemfields Reports Record Ruby Auction Results Despite Challenges at SourceThe average price per carat hit a record high for the miner, which said it remains unaffected by the conflict in Mozambique.
AuctionsDec 18, 2024
Alexandrite Ring Sells for Record-Setting $1.9M at Sotheby’sThe nearly 17-carat stone made history for the color-change gem that, according to the auction house, is experiencing a “notable surge” in the market.
WatchesDec 18, 2024
Historic Titanic Pocket Watch Winds Its Way Back to Tiffany & Co. More than a century after survivors gifted a Tiffany timepiece to the captain of the ship that rescued them, the jeweler has reclaimed it.
TechnologyDec 18, 2024
Picchiotti Utilizes AI in ‘Spotlight’ Video CampaignThe videos highlight how pieces from the “Xpandable” and “Reversible Xpandable” collections put the wearer in the spotlight.
IndependentsDec 18, 2024
Industry Veteran Steve Feldman Set to RetireFeldman reflected on 45 years in the jewelry industry and clarified that it’s not a total retirement.
Events & AwardsDec 17, 2024
Chanel to Receive Gem Award for High Jewelry ExcellenceThe luxury brand is being honored for excellence in high jewelry design in its “Haute Joaillerie Sport” collection.
SourcingDec 17, 2024
Frank Circelli, Founder of Gem Shopping Network, Dies at 75Circelli was a pioneer in the world of TV shopping who is remembered for his passion for gemstones and his big personality.
AuctionsDec 17, 2024
Blue Diamond Fetches $8.8M at Christie’sThe nearly 6-carat stone headlined the recent jewelry auction, which also featured Mica Ertegun’s jewelry.
CrimeDec 17, 2024
‘Black Bin Crew’ Robbers Get 14-16 Years in Prison The three men, who got their nickname because they’d toss the jewelry they stole into black plastic bins, were arrested back in August.
TrendsDec 16, 2024
Marion Fasel’s New Book Delves Into the History of Engagement Rings“The History of Diamond Engagement Rings: A True Romance” is a 128-page small-format book containing more than 165 images.
WatchesDec 16, 2024
Take a Look Inside the New Rolex Boutique on Rodeo DriveGearys opened a 6,200-square-foot Rolex store with a design that pays homage to the brand’s connection to the ocean.
GradingDec 16, 2024
GCAL By Sarine Expands 8X to 2 More Fancy Shapes The diamond cut grade is now available for marquise- and pear-shaped diamonds.
SourcingDec 16, 2024
Diamonds Do Good Announces 2025 Award RecipientsDDG said the honorees’ business practices embody a commitment to positive social impact, industry innovation, and community empowerment.
TrendsDec 13, 2024
Selena Gomez Said ‘Forever Begins Now’ to Marquise Diamond Engagement RingEstimates on the size and value of the solitaire diamond, which is mounted on a diamond pavé-set yellow gold band, vary.
