Sourcing

De Beers’ 2020 Production Down 18%, Lowers ’21 Forecast

SourcingFeb 02, 2021

De Beers’ 2020 Production Down 18%, Lowers ’21 Forecast

The diamond miner and marketer’s updated production target is now 32 million to 34 million carats.

The Orapa Mine in Botswana. De Beers’ production fell 18 percent year-over-year in 2020, including a 28 percent drop in Botswana, its biggest producer. (©De Beers Group, Photo credit: Ben Perry, Armoury Films)

London—Rough diamond production was down 14 percent in the fourth quarter of 2020 and 18 percent on the year for De Beers Group due to mine shutdowns and a drop in demand resulting from COVID-19.

The diamond mining and marketing company reported late last week that it recovered 25.1 million carats of rough diamonds in 2020, down from 30.8 million carats in 2019.

In the fourth quarter, production totaled 6.7 million carats, down 14 percent year-over-year and 7 percent from the third quarter.

In Botswana, De Beers’ biggest producer, production was down nearly 30 percent year-over-year in 2020, falling from 23.3 million carats to 16.6 million carats.

In the fourth quarter, it declined 28 percent, driven by the planned treatment of lower-grade material (ore with a smaller volume of diamonds in it) at Jwaneng. Partially offsetting the drop at Jwaneng was a 9 percent increase at Orapa due to a planned improvement in grade.

Production in Canada, where De Beers operates one mine, Gahcho Kué, fell 15 percent on the year and was down 23 percent in the fourth quarter due to maintenance.

In Namibia, production was down 15 percent year-over-year and 26 percent in the fourth quarter as the marine mining fleet remobilized after being sidelined in Q3.

In South Africa, production nearly doubled year-over-year, jumping from 1.9 million to 3.7 million carats. In the fourth quarter, production nearly tripled from 434,000 carats to 1.3 million.

Venetia, the company’s last mine in the country, posted expected improvement in ore grade at what is the last cut before the open-pit mine transitions into an underground operation.

COVID-19 was the main reason that De Beers’ production fell nearly 20 percent year-over-year.

It had to close or significantly reduce work at its mines for health and safety reasons.

In addition, mid-stream demand for rough was lower as manufacturers also were forced to shut down, then used the resumption of retail activity as a time to destock instead of buying more rough.

For 2021, De Beers has dialed back its expectations for production, citing not COVID-19 but ongoing operational challenges involving the plant at Orapa and lower expected production from the final cut at Venetia.

The company now predicts it will mine between 32 million to 34 million carats of rough diamonds, down from 33 million to 35 million.

RELATED CONTENT: Alrosa Ends Difficult Year With Strong Q4

De Beers echoed what Alrosa said in reporting its

preliminary fourth-quarter and full-year results last month—rough diamond sales picked up in late 2020 after stagnating in the first half of the year due to the pandemic.

Indications are that “encouraging” levels of consumer demand continued in the United States during the holiday season while China also performed well, De Beers said.

Rough diamond sales totaled 6.9 million carats from two sights in Q4, compared with 6.6 million carats from three sights in the third quarter.

The full-year consolidated average realized price declined by 3 percent to $133 per carat from $137 per carat in 2019. An increased proportion of higher-value rough diamonds sold in 2020 was not enough to completely offset the 10 percent reduction in the average rough price index.
Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

The Latest

CrimeMay 18, 2021
Police Searching for 2 Suspects in Armed Robbery of GA Jewelry Store

A third suspect, who was shot during the robbery, has been arrested and charged.

CollectionsMay 18, 2021
New York Isn’t Over, According to the Yurmans

David Yurman’s latest collection is a tribute to a New York City landmark.

Events & AwardsMay 18, 2021
Registration Is Open for JA National Convention

The third annual Jewelers of America National Convention will be held virtually July 19-20.

Brought to you by
How to Engage and Sell to Millennials

Millennials were once feared in the diamond industry, but now this younger generation has become today’s largest diamond buying demographic.

ColumnistsMay 18, 2021
Creative Connecting: Why Jewelers Should Be More Active on YouTube

A strong following on YouTube can boost online visibility and trust in your store’s staff, Duvall O’Steen and Jen Cullen Williams write.

Weekly QuizMay 14, 2021
This Week's Quiz
Test your knowledge of jewelry news from the week of May 10-14, 2021.
Take the Quiz
IndependentsMay 17, 2021
Take a Peek Inside the New Zadok Jewelers Store

The Houston jeweler recently opened a 28,000-square-foot, two-level store.

IndependentsMay 17, 2021
Bill Boyajian Has a New Book Coming Out

“Family Business Succession Planning” covers the dynamics of working in a multigenerational business and prepping for the next generation.

Brought to you by
A New Golden Age

Gold has had its share of ups and downs over the last 5 decades. Here’s why the metal is having another big comeback.

MajorsMay 17, 2021
Pandora’s Head of North America Steps Down

Sid Keswani has left the jewelry company to become president of lifestyle company Centric Brands.

×