State-owned diamond trader, Okavango Diamond Company (ODC) expects that while the exceptional sales of 2021 may not be repeated in 2022, stable demand will still persist during the year, anchoring its sales.
Last week, BusinessWeek revealed that ODC sold $963 million (P11.1 billion) worth of rough diamonds in 2021, up 367% from 2020 and representing an all-time high for the 10-year-old company. Debswana sells 25% of its production to ODC and the balance through the De Beers sales platform.
From a depressed 2020 in which travel bans and global lockdowns hit the diamond industry hard, lower global restrictions and resurgent demand lifted ODC and other players in the industry to an exceptional 2021. Debswana’s sales jumped to a five-year high of P38.1 billion, while production was up 35% to 22.3 million carats, the highest since 2019.
On Tuesday, ODC CEO, Mmetla Masire told FNBB’s annual post-budget review that while the rebound from 2021 was not expected to continue throughout this year, a 'nosedive' in the industry was not anticipated either.
“A number of the opportunities from 2021 are still persisting in 2022, such as the fact that with tourism still not fully open, some of that luxury spending is going into diamond jewellery,” he said. “We are very comfortable that for the next six months and maybe beyond that, we will still have decent returns and margins. “There will be softening this year, but not a nosedive.”
He said at present, smaller diamonds and the industrial variety were still enjoying high prices, while returns for the larger stones had begun softening.
Masire said ODC is looking forward to fully exploiting its allocation of Debswana’s production. The state-owned diamond trader had its 15% allocation increased to 25% in May 2020 but was unable to fully capitalise on the higher share due to the effects of the pandemic.
“We did not enjoy that additional allocation in 2020. “Now we are fully opened at ODC, with all staff working full time from the office and taking weekly COVID-19 tests. “We had a change of strategy in 2021 where because our customers could not come to us in 2021, we had to take the product to them, introducing viewings in Antwerp and Dubai,” he said.
The ODC is also hoping its exceptional Okavango Blue diamond rallies greater interest this year and stirs market excitement.
Okavango Blue, a 20.46-carat blue diamond unearthed at Debswana's Orapa Mine in the third quarter of 2018, has been on display at the American Museum of Natural History in New York, as part of promotional activities towards its sale.
“Our Okavango Blue has drawn a lot of attention in its viewing in New York and there has been a lot of excitement because people have missed the glamour of diamonds around the world,” he said.