De Beers’ rough diamond production decreased by 4% to 7.9 million carats for Q2 2022, primarily due to the treatment of lower grade ore at operations in both Canada and Botswana.
In Botswana, the mining major’s Q2 production decreased by 4% to 5.5 million carats due to lower grade ore being processed at both Jwaneng and Orapa.
Namibian production increased by 67% to 0.6 million carats, primarily driven by continued strong performance from the Benguela Gem since the early delivery of the new diamond recovery vessel in Q1 2022.
De Beers’ South Africa production decreased by 4% to 1.2 million carats due to lower tonnes treated.
Meanwhile, production in Canada decreased by 28% to 0.6 million carats due to treating lower grade ore, unscheduled plant maintenance and the impact of Covid-19 related absenteeism.
De Beers said strong demand for rough diamonds continued into the Q2, with rough diamond sales totalling 9.4 million carats from three Sights, compared with 7.3 million carats from two Sights in Q2 2021 and 7.9 million carats from two Sights in Q1 2022, both of which benefited from strong demand recovery following the impact of Covid-19 in 2020.
“While consumer demand for natural diamonds continued to be robust in the first half, a deterioration of global macro-economic conditions and reduced consumer spending could impact demand for diamond jewellery. Despite this, the combination of ongoing sanctions against Russia, decisions from a number of US-based jewellery businesses to apply their own restrictions on purchases of Russian diamonds, and continued development of provenance initiatives (such as the TracrTM blockchain platform) has the potential to underpin continued robust demand for De Beers’ rough diamonds,” it noted.
The H1 2022 consolidated average realised price increased by 58% to $213/ct (H1 2021: $135/ct), driven by a larger proportion of higher value rough diamonds sold, as well as higher prices. The rough price index increased by 28% compared to H1 2021, reflecting positive consumer demand for diamond jewellery as well as tightness in inventories across the diamond value chain.
De Beers increased its full-year production guidance for 2022 to 32-34 million carats from its earlier estimate of 30-33 million carats. The unit cost guidance for 2022 remained unchanged at c.$65/ct, it said.