JOHANNESBURG (miningweekly.com) – Diamond miner De Beers recovered during the first half of the year after hitting a rough patch in the last six months of 2015.

The company posted a pleasing financial performance after the diamond market stabilised and growth in demand for rough diamonds emerged, said De Beers strategy and corporate affairs executive head Gareth Mostyn.

The diamond giant on Thursday posted a 2% rise in profit to $585-million during the six months to June, with revenue of $3.3-billion achieved after a 29% increase in sales volumes to 17.2-million carats.

“[The results] seem to be a testament that we took the right action,” Mostyn told Mining Weekly Online during a telephone interview on Thursday.

Stronger rough diamond demand and favourable exchange rate movements boosted the results aided by tight operating cost control, cost-saving programmes and portfolio changes.

Rough diamond production for the period under review decreased by 15% to 13.3-million carats, reflecting the miner’s decision to reduce production in response to prevailing trading conditions in the second half of 2015.

Recovering from what Mostyn described as a "tough" last half of 2015, steady consumer demand “held up pretty well” during the six months to June 2016, underpinned by 5% growth within the company’s largest and most mature market, the US, which accounted for 45% of De Beers' diamond market.

Demand in China, the group’s second-largest market, at 17%, was stable during the period under review, while the third-largest market, India, accounting for 7% of De Beers’ market share, delivered sluggish consumer demand for diamond jewellery, exacerbated by a month-long jewellers’ strike against new government regulations.

While it is expected that the diamond market will remain relatively stable over the next six months, Mostyn cautioned on potential downside risks.

“Our production forecast remains the same and we need to continue our focus on costs through savings in production costs, overheads, and capital expenditure and disposal proceeds throughout 2016.”

With forecast diamond production expected to be between 26-million carats and 28-million carats, plans are in place to deliver about $200-million of cash savings in production costs, overheads, capital expenditure and disposal proceeds in 2016.

De Beers will also continue its multimillion-dollar investment strategy across the business to stimulate demand, increase production and protect product integrity.

Moreover, the company is injecting $100-million into the company's Forevermark retailer network this year, which expanded 6.5% in the first half of the year to boast 1 874 outlets in 38 countries, Mostyn pointed out.

In the last six months, De Beers’ Forevermark brand entered three new markets, namely Hungary, Thailand and South Korea.

Mostyn commented that De Beers would also repeat its successful $20-million category-marketing campaign in China and the US to grow consumer demand, while co-funding the Diamond Producer Association’s Real is Rare campaign.

Further, the “exciting” $1-billion, 4.5-million-carat-a-year Gahcho Kué diamond project, in Canada, is within budget and ahead of schedule, with first production expected in the third quarter of this year and commercial production expected by the first quarter of 2017.

The diamond giant is also continuing with its multibillion-dollar Jwaneng Cut-8 project, while the Venetia underground project, which is progressing well, with first production scheduled for around 2022.

The company further reported the near-completion of the sampling and exploration vessel, SS Nujoma, which is leaving Norway this week for Cape Town for its final fit out before becoming operational.