It is great to see such a healthy demand for this great industry, De Beers Group CFO Sarah Kuijlaars said after posting a set of stunning financial results for the world’s leading diamond company by value.

Underlying 2021 earnings before taxes, depreciation and amortisation soared to $1100-million from $417-million in 2020 and unit costs remained broadly flat at $58/ct compared with $57/ct in 2020.

“It’s a really proud day to report this strong set of results and it’s worth putting them in context – a year ago when we spoke, I was reporting on behalf of a loss-making business. It’s a really strong turnaround,” Kuijlaars recalled.

Total revenue increased to $5.6-billion, rough diamond production rose 29% to 32.3-million carats, and capital expenditure increased by 48% to $565-million from $381-million in 2020.

De Beers’ branded diamond jewellery achieved double digit retail growth year-on-year. De Beers has also launched a new brand campaign built around a widening interpretation of the phrase ‘I do’, a time-honoured expression of intent.

“Going forward, we’re seeing continued robust demand. Clearly, we won’t have the same growth rates as we’ve seen in the past [. . .], but we’re confident that the natural diamonds have enduring meaning for consumers, and that will continue into the future,” said an upbeat Kuijlaars, speaking after outgoing Anglo American CEO Mark Cutifani recalled that “in the early days of Covid, we couldn’t sell a diamond. Today, it’s pretty clear there’s been a lack of exploration across the globe and the world is now short of diamonds – a rare product has become a lot rarer”.

In the last 14 months, there has been a 30% increase in diamond prices, with the market moving even quicker than was anticipated.

In South Africa, production increased by 41% to 5.3-million carats; in Botswana, production was 35% higher at 22.3-million carats; in Namibia, production was broadly in line at 1.5-million carats; and in Canada, production was marginally lower at 3.2-million carats.

The execution of Venetia Underground, in South Africa, and Jwaneng Cut-9 expansion project, in Botswana, continued to progress, and the mine life extension of the Namibian land operations was approved during the year. The new AMV3 vessel for Namibia, now named the Benguela Gem, arrived in Cape Town in September to complete preparations for its commissioning in this quarter.

Mining Weekly: What will be the key drivers of demand going forward?

Kuijlaars: We’re well aware that as people come out from the pandemic [. . .] a significant proportion that do have money in their pockets, and have chosen [to spend their disposable income on] diamonds and diamond jewellery. We’re aware that during the pandemic, there was less international travel. This will come back, but also pre-pandemic, certain consumers chose to buy diamonds when travelling to Europe or the US. So we’ve seen the consumer choices adapt, and I think they’ll continue to do so going forward.

De Beers Group rough diamond production totalled 32.3-million carats in 2021. Do you foresee a production increase this year?

t’s worth reflecting that this was during Covid. Also, at the beginning of 2021, there were very heavy rains in South Africa, which led to a pretty slow start in our production. Going forward, we want to really build on that delivery and our guidance is in the same sort of bracket as those 33-million carats.

Supply is continuing to look shy. Is this what contributed to 2021’s higher prices?

We’re all aware that it’s a balance between supply and demand and if we look back in history, of course,there used to be a considerable contribution from the Argyle mine in Australia, which has now shut down. We’re seeing supply on a flattish trajectory going forward and I think we are then really focused on [ensuring] that demand growth is really sustainable.

How much capital will the De Beers Group be spending in 2022 and beyond, and is that growth capital or replacement capital?

We spent $565-million in 2021, and looking forward, we’re absolutely ensuring that we invest across the value chain. We’ve got Venetia Underground, which is really reaching a critical phase and will be going on stream in early 2023. But also in Botswana in our joint venture, Debswana, [there are] really important investments extending the life of the Jwaneng mine. We’re investing more in exploration, also investing more in our brand and consumer markets and then, of course, the whole digital backbone, to which we continue to give a lot of attention.

The production contributions of Botswana, South Africa and Namibia were up or in line in 2021. What are your thoughts around the yields from these jurisdictions?

We work in partnerships with the governments in those various countries, and it’s a really long-term partnership. We continue to work with our partners to ensure that we deliver sustainably, which supports the De Beers growth story, but absolutely provides really important jobs to the communities and obviously a healthy tax flow to those governments.

Canada’s output was flat. Is that likely to change?

Gahcho Kué had a tough year in 2021 and actually shut down because of Covid restrictions. It’s obviously a smaller contribution to the broader portfolio, but a very important one, and we’re really ensuring that the best of the De Beers and the Anglo technical knowledge is passed to that mine to get the best out of the mine the coming years.

What is it that makes genuine gem diamonds continue to sparkle and live up to the long-standing ‘diamonds are forever’ slogan?

Natural diamonds are absolutely unique and they have this really enduring connection to people that we love. It’s great to see how the pent-up demand for weddings is coming through. In addition to those traditional uses, we’re seeing much more consumer demand on omni-channels and also through self-gifting or self-purchasing.