Namibia: De Beers diamond sales lift, local outlook still pressed

Business | 2021-07-29, Page no. 13

by Lazarus Amukeshe

THE SPARKLE IS BACK…De Beers Namibia’s operations have produced 300 000 carats worth of diamonds at the end of June this year. These figures are low and mainly due to vessels under maintenance. Diamond sales have, however, improved, with overall De Beers sales reaching N$44,9 billion this year. Photo: Unsplash

DIAMOND mining conglomerate De Beers sold diamonds worth N$7,5 billion between June and July this year.

Owing to this is good production levels and opened-up markets in China and the United States (US). However, Namibia’s contribution to produced diamonds and the quantity of those sold have taken a dip.

The company announced its six-cycle results yesterday, which is an increase compared to the N$1,7 billion in sales made during the same time in 2020.

Commenting on the sales, the mining major’s chief executive officer, Bruce Cleaver, said the recent sales cycle has seen the continuation of good demand for rough diamonds, driven by a strong demand for diamond jewellery in the key US and China consumer markets.

“With the ongoing strength in consumer sales of diamond jewellery, the outlook remains positive for the second half of the year, subject to the risks the pandemic continues to present across the globe,” he said.

The recent sales figure of N$7,5 billion brings the total sales for the year to N$44,9 billion.

Production levels at the end of June at consolidation have also increased by a diamond recovery which has increased by 134% to 8,2 million carats.

Last year June was impacted by Covid-19, when production was at its lowest.

The lowest base is responsible for the three-digit increase, and rather reflects an increased production to meet a stronger demand for rough diamonds, as well as the impact of Covid-19 lockdowns across southern Africa, where the company has bigger operations.

De Beers has operations in Namibia, South Africa, Botswana and Canada.

In Botswana, production increased by 214% to 5,7 million carats for the first half of 2021.

Namibia’s production decreased by 6% to 300 000 carats, primarily due to planned maintenance on the Mafuta vessel, which was completed in the quarter, and another vessel remaining demobilised.

South Africa’s production increased by 130% to 1,3 million carats due to the planned treatment of higher-grade ore from the final cut of the Venetia open pit.

Production in Canada increased by 14% to 900 000 carats.

De Beers said consumer demand for polished diamonds continues to recover, leading to a strong demand for rough diamonds from midstream cutting and polishing centres – despite the impact on capacity due to the severe Covid-19 wave in India during April and May.

Several analysts globally have said diamond sales and production are expected to rebound to better levels this year.

The local front has, however, shown a lean outlook, with local recovery assets under maintenance.

Beyond the short term, June 2022 is expected to be an important period for Namibian diamond recovery as Debmarine Namibia introduces its state-of-the-art vessel for production.

The company this year confirmed that the construction of its seventh vessel was progressing well, with completion set for the third quarter of this year, and the commencement of production planned for the second quarter of 2022.

The new vessel is expected to up diamond recovery by at least 30%.

At the announcement of the construction, the company said the new vessel would create more than 160 new jobs, pushing the company’s workforce to just above 1 000 employees.

Damen Shipyards, a ship construction company based in the Netherlands, was allocated the tender to construct the vessel.

In 2017, The Washington Post reported that De Beers only explored 3% of its acquired mining rights of more than 3 000 square miles of the Namibian seabed.

This means there is still huge opportunity for the company.

PSG Namibia’s Eloise du Plessis yesterday said the delta strain of the coronavirus has a potential of leading to a bumpier and more uncertain path for the global recovery.

“Nevertheless, we still expect that diamond production and prices will be significantly higher this year compared with 2020, given the general relaxation of restrictions as major economies reach herd immunity through vaccinations and the drawdown in global diamond inventories,” she said.

According to her, some of the major diamond retailers are expecting to see clear signs of consumers spending some of their cash reserves on luxury goods by the northern hemisphere’s autumn this year and this bodes well for certain southern African countries that are heavily dependent on diamond exports to generate foreign earnings and government revenues.

Email: lazarus@namibian.com.na | Twitter: @Lasarus_A

SOURCEhttps://www.namibian.com.na/103925/read/De-Beers-diamond-sales-lift-local-outlook-still-pressed

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