News Bureau

January 24, 2020

DeBeers production decreased by 15% by 4Q

DeBeers rough diamond production decreased by 15 per cent to 7.8 million carats, driven by lower production levels in South Africa and Botswana. While trading conditions have improved since Q3 2019, production was reduced in response to softer rough diamond demand conditions experienced in the year.

Botswana diamond production decreased by seven per cent to 5.9 million carats, Orapa production decreased by 29 per cent, caused by a delay in an infrastructure project and expected lower grades. This was partially offset by a 21 per cent increase at Jwaneng, driven by planned increases in both tonnes treated and grade.

Namibia production decreased by 10 cent to 0.5 million carats, driven by Debmarine Namibia where production decreased by nine per cent to 0.4 million carats due to routine vessel maintenance in Q4 2019. South Africa production decreased by 65 per cent to 0.4 million carats due to lower volumes of ore mined at Venetia as it approaches the transition from open pit to underground.

In addition, Voorspoed production ended in Q4 2018 when it was placed into care and maintenance in preparation for closure. Canada production decreased by three per cent to 1.0 million carats, primarily due to the closure of Victor, which reached the end of its life in Q2 2019 & Gahcho Kué production increased by 28 per cent to 1.0 million carats due to strong plant performance.

Rough diamond sales totalled 7.0 million carats (6.6 million carats on a consolidated basis) from two sales cycles, which compares with 9.9 million carats of sales (9.3 million carats on a consolidated basis) from three sales cycles in Q4 2018.

For the full year, rough diamond sales volumes were eight per cent lower at 30.9 million carats (29.2 million carats on a consolidated basis) compared with 33.7 million carats (31.7 million carats on a consolidated basis) in 2018. In 2019, the overall demand for rough diamonds was lower as a result of challenges in the midstream, with higher polished inventories and caution due to macro-economic uncertainty.

The full-year consolidated average realised price of $137/ct was lower (2018: $171/ct), due primarily to a higher proportion of lower value rough diamonds sold in 2019 and a six per cent lower rough diamond index.

Production guidance for 2020 is unchanged at 32-34 million carats, subject to trading conditions. The higher production anticipates an improvement in trading conditions compared with 2019 and is driven by an expected increase in production from Venetia.

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