De Beers' Q1 Production Falls 8% on Reduced Output in S. Africa

Mining and Exploration
25/04/2019 15:26

De Beers Group reported a diamond production decline in the first quarter of 2019 driven by a 65 reduction in South Africa as the Venetia mine as it approaches the transition from open pit to underground mining. Venetia yielded only 0.4 million carats due to lower mined volumes, while the Voorspoed mine was placed onto care and maintenance in Q4 2018 in preparation for closure. De Beers' production guidance for 2019 remains unchanged at 31 - 33 million carats, subject to trading conditions.

Botswana saw the only increase among the four countries contributing to De Beers' diamond output, as production rose by 2% to 6.0 million carats. This was driven by Jwaneng production increasing as planned by 12% to 3.3 million carats. Orapa production decreased by 7% as a result of a plant shut down in the period. The volume of carats produced in Namibia and Canada also fell, with Namibian output declining by 9% to 0.5 million carats as a result of the land operation transitioning Elizabeth Bay to care and maintenance. Debmarine Namibia production was in line with Q1 2018 at 0.4 million carats. In Canada, production decline by 3% to 1.0 million carats (51% of Gahcho Kué JV with Mountain Province) due to planned lower grades at the mine.

Rough diamond sales volumes fell by 15% to 7.5 million carats (7.2 million carats on a consolidated basis) from two sales cycles compared with 8.8 million carats (8.4 million carats on a consolidated basis) from the same number of sales cycles in Q1 2018, as overall demand for low value rough diamonds remained subdued in the quarter. First quarter revenues from the two sales cycles fell by 19% to $996 million from $1.235 billion in 2018, though they gained some ground in Cycle 3 with $575 million in sales. For the year thus far, the Group's $1.57 billion in sales is still lagging 11% behind the $1.76 billion in sales over the first two sales a year ago.