DE BEERS reported sixth cycle rough diamond sales of $510m, a seven percent increase on the confirmed sales of $477m in the previous cycle.
Rough diamond sales for the comparative cycle of the group’s 2020 financial year totalled $116m and reflected the disruption wrought by Covid-19 related lockdowns.
“Our sixth sales cycle of the year has seen the continuation of good demand for rough diamonds, driven by strong demand for diamond jewellery in the key US and China consumer markets,” said Bruce Cleaver, CEO of De Beers.
“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 that the pandemic continues to present across the globe,” he added.
The sixth cycle sales number provides further evidence that De Beers, which is 85% owned by Anglo American, will be a more significant contributor to the UK-listed group’s 2021 financial year. De Beers is estimated to comprise about 6% of Anglo’s 2021 earnings before interest, tax, depreciation, and amortisation (EBITDA), generating $1.5bn in EBITDA, according to a recent report by Goldman Sachs.
Anglo American is scheduled to report its interim financial results on Thursday (July 29).
The outlook for the diamond sector is vastly improved compared to last year.
Goldman Sachs also said that De Beers had production extension options over the next two to three years through its Namdeb business, which will add 500,000 carats a year from 2022, some five million carats from 2023 from going underground at Venetia in South Africa, and a potential nine million carats from Jwaneng in Botswana from 2027.
In comparison, there is limited supply-side growth from the rest of the world’s diamond sector whilst Rio Tinto decommissioned its Argyle mine this year.
De Beers has guided to rough diamond production of between 32 to 34 million carats for this year, increasing to 30 to 33 million carats in the 2022 and 2023 financial years.
