De Beers’ Diamond Revenues Drop
Anglo-American‘s diamond subsidiary, De Beers, has reported a significant decline in diamond revenues for its latest sales cycle.
Debeers announced that the seventh sales cycle of 2023, which took place between 14 and 29 August, generated only $370 million in sales. This is a drop from the previous cycle’s $411 million and $456 million, and a significant decline from the seventh cycle of 2022, which generated $638 million.
According to De Beers CEO, Al Cook, the decline in revenues can be attributed to the current macroeconomic environment, which has led to reduced demand for diamond jewellery in key consumer markets. Additionally, the traditionally lower levels of midstream trading during the summer period have also impacted sales.
De Beers operates diamond mines across Botswana, Canada, Namibia, and South Africa, and sells 90% of its stones through Sightholder sales. The remaining 10% of diamonds are sold through auctions. The company’s sales events, known as Sights, are held 10 times a year.
The decrease in diamond revenues comes as a blow to Anglo American, as the company had been hoping for a recovery in the diamond market following the impact of the COVID-19 pandemic. However, the cautious approach taken by buyers in light of the current economic climate has resulted in decreased sales.
Recently the Botswana Government increased its share in the Partly Debeers owned Debswana.
“We’re very happy with the outcome. It could have been better but you know with a partnership you’ve always got to give as you take,” Masisi said, adding that the deal will give Botswana 10 billion pula ($762 million) to diversify the economy and improve the diamond value chain as well as help impart skills to young people and create jobs.
Under the new agreement, Botswana’s state-owned diamond trader is set to receive a larger portion of the output from Debswana, the De Beers’ unit responsible for approximately two-thirds of the group’s annual production. The revised terms stipulate that the state-owned trader will now be entitled to 30% of Debswana’s output – a significant increase from the previous arrangement. Additionally, the government has announced a tentative agreement that holds the potential for this share to further rise to a maximum of 50% in the future. The deal also includes new 25-year mining licenses for Debswana.
Anglo owns Unki mine in Shurugwi.