Debswana keeps production steady
Staff Writer | Tuesday April 25, 2017 18:00
According to first quarter diamond output statistics released by parent company, Anglo American yesterday, Debswana’s production decreased marginally by three percent to 5.2 million carats when compared to the same period last year.
“Jwaneng’s production decreased by eight percent due to expected lower grades, partly offset by Orapa, which increased by five percent due to expected higher grades,” Anglo said in a statement.
Debswana is owned jointly and equally by government and De Beers, which in turn is 85% owned by Anglo American.
In the period, Orapa produced 2.1 million carats while Jwaneng dug up 2.9 million; Letlhakane (130,00 carats) while Damtshaa remained under care and maintenance.
Debswana aims to keep production flat at around 20 million carats this year, while De Beers says it has set a production guidance of 31 to 33 million carats for 2017.
Government gets about 80 thebe from every pula worth of diamonds sold by Debswana to De Beers. Diamond revenues are also accrued from state-owned Okavango Diamond Company (ODC), which sells 15% of Debswana run on mine annual output.
According to estimates provided by Rapaport, De Beers closed 2016 with sales up 36% to $5.58 billion.
On the other hand, ODC’s reported sales grew 80% to $546.5 million in 2016, with its average price declining 13% to $160.25 per carat.
“We expect rough demand will improve in the first quarter as manufacturers start to ramp up production to meet resurgent polished demand. It will be a challenge for mining companies to resist raising rough prices, but manufacturers are more determined not to overpay for rough than they used to be.
“There is also some concern rough supply will increase as various new mining projects come to fruition. Miners and manufacturers will be careful not to oversupply rough or polished to the trade, which might lead to a repeat of 2015’s rough price bubble and resultant market slump,” Rapaport said.
Apart from Botswana, De Beers also has mines in South Africa, Canada and Namibia.
In the period, De Beers’ rough diamond production increased by eight percent to 7.4 million carats, reflecting the contribution of Gahcho Kué in Canada, as well as increases in response to improved trading conditions.
Production at Namdeb Holdings (Namibia) increased by six percent to 0.5 million carats due to marginally higher grade at Namdeb.
In DBCM (South Africa), production increased by 19% to 1.1 million carats largely as a result of higher grades at Venetia.
Production in Canada increased by 290% to 0.6 million carats due to the contribution of Gahcho Kué, which reached commercial production on March 2, 2017.
Total rough diamond sales volumes in the first quarter of 2017 were 14.1 million carats from three sights, compared with 8.1 million carats from two sights in the first three months of 2016.