De Beers eyes output rebound in 2021
Pauline Dikuelo | Friday March 5, 2021 15:36
The luxury gemstone giant, which traditionally adopts a ‘cautiously optimistic’ approach to production targets, says the planned output this year is subject to trading conditions, the extent of further COVID-19 related disruptions and ongoing operational challenges.
Briefing the media on the group’s 2020 results last week, executive vice-president diamond trading, Paul Rowley said they forecast higher production would be driven by an expected increase in ore and improved grade performance at both Jwaneng and Venetia (South Africa).
Last year, the diamond giant dug up 25.1 million carats, an 18% decrease from the 30.8 million carats recorded in 2019, after production was cut in response to lower demand caused by the pandemic.
Botswana’s Debswana, which accounts for up to two-thirds of De Beers’ annual production, imposed a COVID-19 lockdown from April 2 to May 18, 2020, while also instituting treatment of lower grade material at both Jwaneng and Orapa, as a production response to lower demand.
Debswana’s mines decreased output by 29% to 16.6 million carats from 23.3 million carats in 2019, with volumes at Jwaneng dropping 40% to 7.5 million carats and those at Orapa declining by 16% to nine million carats.
Rowley said the challenging trading conditions for 2020 as a whole were reflected in the group’s financial results as the revenue amounted to $3.4 billion (P37. 4 billion), a slight decrease from the $4.6 billion (P50.4 billion) recorded in 2019.
However, he said the long term outlook for the sector remains positive as De Beers continues to focus on its business transformation to support the continued growth of its own business and the wider diamond value chain.
“We are well-positioned to capitalise on this strengthening of the market where natural diamonds continue to play an enduring and unique role,” he said.
He further said the recent consumer demand trends have been positive in key markets and industry inventories are in a healthier position, providing the potential for continued recovery in rough diamond demand during 2021, subject to the ongoing impact of COVID-19.
“Consumer desirability for natural diamonds is set to remain high over the medium to long term despite the economic impact of the pandemic and increasing supply of lab-grown diamonds,” he said.