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

Recorded WebinarsJan 14, 2022
Watch: What Will 2022 Bring?

Sherry Smith, Peter Smith and Edahn Golan join Editor-in-Chief Michelle Graff and try to answer the question, how long will the party last?

EditorsJan 14, 2022
See a Few of Betty White’s Best Jewelry Looks

Editor-in-Chief Michelle Graff celebrates the Golden Girl’s jewelry style ahead of what would’ve been her 100th birthday.

TrendsJan 14, 2022
All About Megan Fox’s Engagement Ring from Machine Gun Kelly

Designed by Stephen Webster, it’s a ring-stack take on the toi et moi style.

Brought to you by
Melee the Show Launches Tucson Event, Returns to New York in 2022

The boutique tradeshow, happening first in Tucson then New York City, brings together upscale designers from around the world.

GradingJan 14, 2022
GIA Names Anna Martin SVP for Institute, Industry Relations

She previously served as its senior vice president of business development and beneficiation.

Weekly QuizJan 13, 2022
This Week’s Quiz
Test your knowledge of the latest jewelry news with this quick test.
Take the Quiz
TrendsJan 14, 2022
Piece of the Week: Made by Malyia’s Plunging Ocean Wave Hoops

Combining thoughtful design and wearability, they were a standout of 2021.

MajorsJan 13, 2022
Robbins Brothers’ Management Buys Back Company

The jewelry store chain was sold to a private equity firm as part of bankruptcy proceedings in 2009.

Brought to you by
Rare & Forever Can Help You Tell A New Story At The Counter And Close More Sales!

A.I. technology is revolutionizing the jewelry business through more accurate and consistent diamond grading.

Policies & IssuesJan 13, 2022
There’s Still Time to Sign Up for BIJC’s IDEA Sessions

The first session is scheduled for Jan. 19 and focuses on addressing racial justice and confronting one’s biases.

×