Guest Contributor | Mar 16, 2018 | 0
De Beers reports major decrease in 2nd quarter diamond production
Both Namdeb and Debmarine reported substantial decreases in output for the second quarter of this year. The results were released this week Wednesday as part of the quarterly reporting of the De Beers Group. International diamond sales volumes, however, improved for the first semester of 2016 compared to the first semester of 2015.
However, the De Beers rough diamond price index for the six months to June was on average 16% lower than in the first half of 2015
The De Beers Group’s production report for the second quarter of 2016 notes that Namdeb Holdings has experienced a decrease in production of 31%. The report stated that Debmarine’s output also decreased.
The corporation noted that diamond production internationally for the second quarter of 2016 decreased by 19% to 6.4 million carats, reflecting the decision to reduce production at all mines in response to weak trading conditions in the second half of 2015. De Beers elaborated that Debmarine’s reduced output is due to the extended plan in port maintenance of the Mafuta mining vessel. At Namdeb’s land operations, lower grades were recorded.
In the first quarter of this year, Namdeb produced 444,000 carats. This figure plummeted in the second quarter to only 296,000 carats.
Other mining operations of the group also noted general decreases in production as De Beers Consolidated Mines South Africa recorded a 12% to 5.2 million carats. Another production decrease was noted due to the completion of the sale of Kimberly Mines in January 2016 as production decreased by 26% to 821,000 carats.
The output from Orapa mine in Botswana was also reduced while the Damtshaa mine was put on care and maintenance from 1 January 2016.
Consolidated rough diamond sales in the second quarter of 2016 were 9.6 million carats (from three Sights ) compared to 4.9 million carats (from two Sights ) in the second quarter of 2015. Apart from the additional Sight in 2016, De Beers Group said this increase reflected higher midstream restocking from lower inventory levels in 2015. Consolidated sales volumes for the first half of 2016 were 17.2 million carats compared to 13.3 million carats for the first half of 2015 (from five Sights, in each case).
As a comparison, De Beers Canada’s production decreased by 71% to 147,000 carats due to Snap Lake mine being placed on care and maintenance in December 2015. Production at Victor mine was in line with the second quarter of 2015.
Full year production guidance for the whole De Beers Group remains unchanged at 26 to 28 million carats, subject to trading conditions.
Meanwhile, huge mining corporations such as Anglo American’s shares dropped more than 10% to R138.45 on the JSE on Wednesday after it released a report showing reduced or flat production of most commodities in the June quarter. Under CEO Mark Cutifani, the group’s strategy is to restructure and sell assets to focus only on its most profitable concerns in diamonds, platinum and copper.