De Beers buoyant on sales

• Confident of recovering from huge 2020 losses • As future is bright for diamond markets in 2021 • De Beers expects to mine over 35 million carats

STRIDES WRITER

Despite suffering a debilitating blow on its financial highlights owing to Covid-19 cold in 2020, De Beers Group is optimistic for recovery in 2021 with market outlook for diamonds shinning.

The giant diamond Group recently indicated while sharing its 2020 financial results that the total sales volumes on a 100% basis were 22.7 million carats equated to 30.9 million carats in 2019.

“The diamond industry started 2020 positively after a strong US holiday season at the end of 2019, with robust demand for rough diamonds. The onset of the Covid-19 pandemic, and the measures taken by governments in response, had a profound impact on global diamond supply and demand. Much of the industry was temporarily unable to operate, with up to 90% of the jewellery stores closed at the peak of lockdowns, first in China, then in Europe and the US,” said Group.

Due to lockdowns in India and associated flexibility offered to customers, it said its total revenue fell by 27% to $3.4 billion (2019: $4.6 billion) with rough diamond sales falling by 30% to $2.8 billion.

The De Beers Executive Vice President Diamond Trading, Paul Rowley said the market outlook for diamond demand has been promising since the beginning of 2021 as compared to last year.

He noted that revenues stood at $3.4 billion in 2020 as compared to the $4.6 billion posted in 2019, representing 30% decline but he adamant that Botswana mines will recover well in 2021.

De Beers Group is a global diamond domain in control for marketing Debswana diamonds yield. The Group mines about 60% of its rhombi in Botswana mines of Jwaneng, Orapa, Letlhakane and Damtshaa over Debswana, based on a 50-50 partnership with the Government of Botswana.

Rowley said the COVID-19 had negative adverse effects on the business operations as it pushed the business to cease some of its operations but note that transformation helped to curb losses.

“Our rough diamond sales volumes decreased by 27% to 21.4 million carats (2019: 29.2 million carats). We anticipate to produce over 35 million carats this year,” he said oozing with confidence.

He noted that Botswana would play a crucial role in boosting the business recovery in terms of the increased carats expected to be excavated from the Debswana based mines in the country.

The decline in rough diamond sales is increasingly becoming a growing pattern for the Group.

“Rough diamond production decreased by 18% to 25.1 million carats (2019: 30.8 million carats) in response to lower demand due to the pandemic and the Covid–19-related shutdowns in the southern Africa during the first half of the year. In Botswana, production decreased by 29% to 16.6 million carats (2019: 23.3 million carats), with volumes at Jwaneng reduced by 40% to 7.5 million carats (2019: 12.5 million carats), while production at Orapa decreased by 16% to 9.0 million carats (2019: 10.8 million carats),” said the blue chip leading rough diamonds company.

The decline in Botswana according to the company was largely due to a nationwide lockdown from 2 April to 18 May, and the planned treatment of the lower grade material at both Jwaneng and Orapa mines following their restart, as a production response to lower demand, De Beers Group revealed.