Diamond miner De Beers has revised its full-year production guidance downward to about 31-million carats, leaning towards the lower end of the previous range of between 31-million and 33-million carats, in response to weaker trading conditions experienced during the second quarter.
De Beers is currently producing to demand and, in a statement issued on Thursday, the miner reported that the revision to its output guidance was as a result of rough diamond production having decreased by 14% to 7.7-million carats, mainly driven by reductions in Debswana, in Botswana, and De Beers Consolidated Mines (DBCM), in South Africa.
Debswana’s production decreased by 9% to 5.7-million carats, which was driven by a decrease at Orapa of 23%, to 2.5-million carats, following a planned plant shutdown brought forward from the second half of the financial year.
In turn, this impacted on production late during the first quarter and early during the second quarter.
Production at Jwaneng increased by 7% to 3.2-million carats, driven by an increase in tonnes treated, the miner said.
In Namibia, at Namdeb, production decreased by 35% to 300 000 ct, driven by the Elizabeth Bay transitioning onto care and maintenance during the fourth quarter of 2018 and planned maintenance on the Mafuta crawler vessel.
In South Africa, at DBCM, production decreased by 44% to 600 000 ct owing to lower mined volumes at Venetia as it approaches the transition from openpit to underground mining.
In addition, Voorspoed production came to an end as it was placed onto care and maintenance during the fourth quarter of 2018, in preparation for closure.
Production in Canada decreased by 9% to 1.1-million carats owing to planned lower grades at the joint venture Gahcho Kué mine, while production at Victor decreased by 4% to 200 000 ct as it reached the end of its life during the second quarter.
Overall, rough diamond sales were nine-million carats from three sales cycles compared with ten-million carats from the same number of sales cycles during the second quarter of 2018.
This is reflective of the demand for rough diamonds remaining subdued as a result of challenges in the midstream with higher polished inventories, and caution owing to macroeconomic uncertainty, including US-China trade tensions, De Beers stated.
For the first half of 2019, the average realised rough diamond price decreased by 7% to $151/ct, which De Beers said was driven by a 4% reduction in the average rough price index and a change in the sales mix in response to weaker conditions.
Meanwhile, in a separate statement, Anglo American CEO Mark Cutifani said that, in view of the prevailing market conditions, it was expected that De Beers would continue to produce to demand for the year.
Anglo said De Beers remained broadly on track, overall, to deliver the new full-year production target.
Anglo American owns 85% of De Beers.