Diversified miner Anglo American has released its Q1 2017 production report, announcing De Beers rough diamond production during the peariod increased by eight per cent over Q1 2016 to 7.4 million carats, "reflecting the contribution of Gahcho Kué in Canada, as well as increases in response to improved trading conditions." Q1 2017 production fell slightly from 7.8 million carats produced in Q4 2016. Total rough diamond sales volumes in Q1 2017 were 14.1 million carats (13.7 million carats on a consolidated basis) from three sights, compared with 8.1 million carats (7.6 million carats on a consolidated basis) from two sights in Q1 2016. They add, "This increase reflected stronger demand in Sight 1 2017, particularly for lower value goods in stock at 31 December 2016."
It also reflects, as Thomas Biesheuvel points out for Bloomberg, that, "De Beers sold almost twice the diamonds it mined in the first quarter as the top producer cleared stocks that piled up after India torpedoed demand in the local gem industry by abolishing large-denomination banknotes." India’s sudden decision to abolish 500 rupee ($7.30) and 1,000 rupee banknotes in an effort to tackle corruption caused demand for smaller, lower quality gems to fall, as local polishers and traders often rely on cash transactions. De Beers responded by allowing clients to refuse more of the company’s cheaper stones at its sales than typically allowed under complex offering arrangements. It also let them turn down lower-quality gems from mixed assortments, writes Biesheuvel. "This year", he writes, "the producer has begun offloading some of the stocks it built up as a result."
The big contributor to the increase in production came from De Beers Canada, as production increased 290% to 631,000 carats due to the contribution of Gahcho Kué, which reached commercial production on 2 March 2017. Debswana (Botswana) production decreased marginally to 5.2 million carats. At Jwaneng, production decreased 8% due to expected lower grades, partly offset by Orapa, which increased 5% due to higher grades. Production from Namdeb Holdings (Namibia) increased 6% to 472,000 carats due to marginally higher grade at Namdeb, while Production at De Beers Consolidated Mines in South Africa increased 19% to 1.1 million carats, largely as a result of higher grades at Venetia. Full year production guidance remains unchanged at 31 to 33 million carats, subject to trading conditions.