AuctionsNov 26, 2024
Christie’s To Auction Collection of Suzanne Belperron JewelsIt’s one of the most impressive assemblages of the French designer’s pieces ever to come to auction, Christie’s said.
SourcingDec 16, 2019
De Beers’ Sales Drop 26%, Production Forecast Cut for ‘20
Parent company Anglo American said it’s been a “tough market” for diamonds.
A shot of Orapa, one of the diamond mines De Beers Group operates in Botswana. Parent company Anglo American cut its production forecasts for the miner for fiscal years 2020 and 2021. (Photo courtesy of De Beers Group)
London—De Beers Group parent company Anglo American Plc said the diamond miner’s sales fell 26 percent this year amid “challenging market conditions,” and it’s lowering its sights on production in the near future.
In an update for investors and analysts released last week, the London-based company said De Beers is expected to mine approximately 31 million carats of diamonds in 2019, down 11 percent from 35 million last year.
Prices on a full-year basis have dropped about 20 percent while the diamond price index is down about 5 percent.
De Beers’ mix is down in terms of quality (by price) about 15 percent, due in part to the company holding back some higher-quality goods in hopes market conditions improve.
On a call with analysts held in conjunction with the update, Anglo Chief Executive Mark Cutifani said it has been a “tough market” for diamonds.
In an email to National Jeweler, De Beers spokesman David Johnson elaborated on what made 2019 so tough for the miner.
He said a weak 2018 holiday season meant retailers did not need to restock early in the year.
This created an “amplified impact on demand up through the value chain,” affecting diamond manufacturers, who continue to struggle to secure financing for their operations, and mining companies like De Beers.
That’s why De Beers sold less rough in 2019 and has cut its production forecast for the next couple years.
Johnson said De Beers’ struggles are not the result of losing market share to lab-grown diamonds.
“The lab-grown diamond market remains very small compared with the natural diamond market (around 1-2 percent of the size of the natural diamond market), and all our research shows that consumers see natural diamonds and LGDs as different product categories, suited to different occasions.
“As noted above, consumer demand for diamond jewelry has been broadly stable compared with last year, and the changes in our rough diamond sales and production outlook are a result of the midstream challenges we’ve seen, rather than being related to anything at the consumer level of the industry.”
Anglo’s Cutifani said on the call he is waiting until the first couple sales of 2020 to make predictions about next year.
“We’ve certainly seen a little bit of improvement later in the year. I think the best thing to say is the first couple of sights in the new year will be, I think, a
better point in terms of how that market is going.
“We’ve seen some encouragement, but I think it’s still a little too early to bank that in any more of a substantive sense.”
Bain & Co. said in its annual diamond report released last Wednesday that 2020 will be “a better year” for the industry but doesn’t expect a full recovery until 2021.
Anglo has cut its diamond production forecast for the next two years.
In 2020, it expects De Beers will mine 32-34 million carats, down from its previous outlook of 33-35 million. For 2021, the forecast was cut from 35-37 million carats to 34-36 million carats.
Production guidance for FY 2022 is 33 to 35 million carats.
Anglo executives also gave a brief update on Chidliak, a potential diamond mining site on Canada’s Baffin Island that De Beers bought from Peregrine Diamonds Ltd. in September 2018.
Cutifani said the company is currently examining some different technologies for mining diamonds on the cold, remote island and likely will give a progress update on the project in mid-2020.
“More generally, in De Beers the focus is obviously on market and how we’re positioning in the marketplace,” he said. “Again, we think there’s some encouraging signs, but we don’t want to talk to those too early, so we’ll wait and see the first few sights next year.”
On a whole, Anglo American, which also mines platinum and copper, said it expects production to be up 1-2 percent year-over-year in 2019.
In 2020, it forecasts a 3 percent increase in production, aided in part by the diamond market “coming back to balance,” Finance Director Stephen Pearce said.
“We’ve seen some encouragement, but I think it’s still a little too early to bank that in any more of a substantive sense.”
Bain & Co. said in its annual diamond report released last Wednesday that 2020 will be “a better year” for the industry but doesn’t expect a full recovery until 2021.
Anglo has cut its diamond production forecast for the next two years.
In 2020, it expects De Beers will mine 32-34 million carats, down from its previous outlook of 33-35 million. For 2021, the forecast was cut from 35-37 million carats to 34-36 million carats.
Production guidance for FY 2022 is 33 to 35 million carats.
Anglo executives also gave a brief update on Chidliak, a potential diamond mining site on Canada’s Baffin Island that De Beers bought from Peregrine Diamonds Ltd. in September 2018.
Cutifani said the company is currently examining some different technologies for mining diamonds on the cold, remote island and likely will give a progress update on the project in mid-2020.
“More generally, in De Beers the focus is obviously on market and how we’re positioning in the marketplace,” he said. “Again, we think there’s some encouraging signs, but we don’t want to talk to those too early, so we’ll wait and see the first few sights next year.”
On a whole, Anglo American, which also mines platinum and copper, said it expects production to be up 1-2 percent year-over-year in 2019.
In 2020, it forecasts a 3 percent increase in production, aided in part by the diamond market “coming back to balance,” Finance Director Stephen Pearce said.
More on Sourcing
The Latest
ColumnistsNov 26, 2024
The Smart Lab: 7 Strategies for Refining Your Holiday Email Marketing CampaignsSuccessful email marketing campaigns are all about timing, personalization, and compelling CTAs, Emmanuel Raheb writes.
MajorsNov 26, 2024
GIA’s Board of Governors Adds 2 New MembersRetail leader Lisa Bridge and geology professor Dr. Wendy Bohrson joined the organization’s board.
Brought to you by
Navigating Cybersecurity: Essential Guidance for JewelersFrom protecting customer data to safeguarding inventory records, it's crucial to learn how to tackle cybersecurity challenges.
MajorsNov 26, 2024
Ben Bridge Jeweler Unveils This Year’s ‘Benny Bear’ Look out for a black bear wearing a purple Santa hat and its zippered tummy pouch made for holding a holiday gift from Ben Bridge Jeweler.
Weekly QuizNov 26, 2024
This Week’s QuizTest your jewelry news knowledge by answering these questions.
Lab-GrownNov 25, 2024
Lab-Grown Co. Lusix Sold to 2 Companies for $4M Fenix and Dholakia Lab-Grown Diamonds have jointly acquired the Israel-based company, which grows diamonds using solar power.
IndependentsNov 25, 2024
Sophie Bille Brahe Opens First US StoreThe Danish brand has opened an appointment-only location on Madison Avenue in New York City.
Brought to you by
Enhance Your Expertise with IGI’s In-Person Courses in NYCThis fall, sharpen your skills in jewelry grading, quality control and diamond assessment.
Events & AwardsNov 25, 2024
The Original Miami Beach Antique Show Panel to Feature Fred SavageThe actor and watch enthusiast will be part of the show’s education lineup.
EditorsNov 22, 2024
Out & About: Inside the CD Peacock MansionStep inside the nearly 21,000-square-foot suburban Chicago jewelry store with Editor-in-Chief Michelle Graff.
CollectionsNov 22, 2024
Piece of the Week: Xander Jane’s ‘Spiked’ Pearl StudsThese punk-inspired earrings from the new Canadian brand’s debut collection reveal the alter ego of the classic pearl.
SourcingNov 22, 2024
Facets of Fire Expands to Include Pear, Marquise DiamondsThe company brings its nanotechnology to two new fancy cuts for diamonds that feature its signature color and brilliance.
Supplier BulletinNov 21, 2024
Tasha R Releases 2025 Labbelle Lab Diamond Jewelry CatalogSponsored by Tasha R
AuctionsNov 21, 2024
Gold Watch Gifted to Titanic Rescue Ship Captain Sells for $2MThree Titanic survivors presented him with the personalized Tiffany & Co. timepiece about a year after the tragedy.
MajorsNov 21, 2024
Harris Jewelry Ordered to Reopen Claims Portal for Refund RequestsA federal court found that the jewelry store chain violated terms of the settlement reached after it was accused of defrauding customers.
CollectionsNov 21, 2024
Channel Elphaba in Muse’s ‘Have a Heart x Cynthia Erivo’ CollectionCynthia Erivo chose Dreams of Hope, an organization dedicated to empowering LGBTQA+ youth, as the charity for this year’s collection.
MajorsNov 21, 2024
Rocksbox Opens Pop-Up Store in San FranciscoThe new space was designed to evoke a warm, inviting vibe.
IndependentsNov 21, 2024
Mary Moses Kinney Is Now Part of The Edge’s Team Kinney, who spent nearly 30 years at IJO, has been hired to head Abbott Jewelry Systems’ new virtual marketplace.
CrimeNov 20, 2024
Sotheby’s to Pay $6.25M Settlement to NY State for Alleged Tax FraudThe auction house was accused of helping clients avoid paying taxes on millions of dollars’ worth of art purchased from 2010 to 2020.
Events & AwardsNov 20, 2024
Kering Debuts New Jewelry Award With Sustainability FocusThe four finalists will present their pieces at the 2025 JCK Las Vegas show.
CollectionsNov 20, 2024
Pamela Love Channels Surrealist Artists in New CollectionThe “Camera Oscura” collection showcases earring designs celebrating female Surrealist artists Claude Cahun and Leonor Fini.
Policies & IssuesNov 20, 2024
Columbia Gem House Raises $10K for Reforestation EffortsThe money will fund the planting of 10,000 trees in critical areas across Oregon, Arizona, Montana, and other regions.
Events & AwardsNov 20, 2024
The Jewelry Symposium Opens Registration, Scholarship ApplicationsThe event centered on advancing jewelry manufacturing technology will return to Detroit in May 2025.
CrimeNov 19, 2024
Woman Killed in Armed Robbery of Sacramento Jewelry StoreLocal reports identified the woman as the wife of the jewelry store owner.
AuctionsNov 19, 2024
‘A Tsar’s Treasure’ Fetches $2.9M at Sotheby’s Jewelry SaleA collection of pieces owned by Ferdinand I, the first king of modern Bulgaria, and his family, blew away estimates in Geneva last week.
MajorsNov 19, 2024
Trove Opens First US Flagship in NYCThe Australian jewelry box brand’s new West Village store will showcase new jewelers each month through its Designer in Residence program.
CollectionsNov 19, 2024
Snoop Dogg’s New Jewelry Collection Is All About Love“Lovechild” was created in partnership with Carolyn Rafaelian’s Metal Alchemist brand.
