Africa-Press – Namibia. THE introduction of Debmarine Namibia’s Benguela Gem vessel last quarter has pushed up diamond recovery volumes by 67,2%, when compared to production figures last year.
According to production updates by De Beers late last week, Namibia was the only country out of its four diamond-mining operations with increased production levels.
Diamonds recovered for the second quarter of 2022 by Namibia stood at 565 000 carats – a 67,2% increase from the 338 000 carats recovered during the same quarter in 2021.
South Africa, Botswana and Canada all saw production levels dipping at 4%, 4% and 24%, respectively.
The quarter saw De Beers recording a production level of 7,9 million carats.
An analysis by Gerrit van Rooyen of Oxford Economics shows that overall, De Beers mined fewer diamonds in the southern African region in the second quarter of 2022.
Although dazzling diamond prices have propped up diamond earnings in the first half of this year, prices may have peaked in June due to slowing global demand.
De Beers’s production of rough diamonds decreased by 3,7% year on year mainly due to the treatment of lower-grade ore at operations in both Canada and Botswana.
Botswana’s production has decreased as a result of lower-grade ore being processed at both the Jwaneng and Orapa mines.
South Africa’s production has decreased due to lower tonnes treated.
In January, De Beers said the Venetia mine’s (South Africa’s largest diamond mine, situated in the Limpopo province) transition from an opencast mine to an underground mining operation was more than 50% complete.
Diamond production in Angola increased by 16,6% year on year to 2,4 million carats, according to the latest figures from the Angolan Ministry of Finance.
De Beers does not currently operate diamond mines in Angola.
Turning to rough diamond sales, the demand for diamond jewellery has proven to be robust thus far in 2022, mainly thanks to buoyant consumer sentiment in the key markets of the United States (US) and China, Van Rooyen says.
Furthermore, dwindling inventories within the global diamond supply chain have resulted in demand outstripping supply, prompting De Beers to raise prices at its auctions this year.
Rough diamond sales measured US$630 million in De Beers’ sixth sight (concluded in June) of 2022, compared with US$514 million in the same sight of 2021.
The year-to-date performance shows even more promise, as sales in 2022 are 24,4% higher than during the same period in 2021.
Despite the recent dip in production and disruptions in the diamond market, De Beers has raised its production guidance for the year to 32 to 34 million carats from 30 to 33 million carats previously.
The company remains broadly on track to reach this guidance, as total production for 2022’s first half stands at 16,9 million carats.
The ongoing sanctions against Russia provide an opportunity for De Beers to capture a larger market share, while sales in June were buoyed by the JCK Las Vegas jewellery trade show in the US, the summer wedding season, and the reopening of retail stores in China, following Covid-19-related lockdowns.
However, there are tentative signs that the tide is turning for diamond prices due to deteriorating demand, which is also a risk for production.
Bruce Cleaver, De Beers Group chief executive officer, was recently quoted as saying: “Following a period of consistently robust demand in the first half, we continued to see steady demand for De Beers rough diamonds in the sixth sales cycle of the year.
“However, the diamond industry continues to adopt a watchful approach in light of the risks to consumer sentiment presented by macroeconomic challenges.”
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