De Beers Group has reported a significant decrease in rough diamond production for the second quarter of 2024, reflecting ongoing market challenges and strategic adjustments. The total carats recovered dropped by 15% to 6.4 million carats, compared to 7.6 million carats in Q2 2023. This decline is attributed to higher than normal inventory levels in the midstream and a slower-than-expected recovery in demand.
Botswana-based production fell by 19% to 4.7 million carats, primarily due to intentional reductions in plant feed mix at Jwaneng to process existing surface stockpiles. Orapa’s production remained stable. In Namibia, output decreased by 8% to 0.6 million carats, influenced by planned vessel maintenance at Debmarine Namibia, partially offset by mining higher grade areas at Namdeb.
De Beers’ South African production increased by 8% to 0.5 million carats, benefiting from processing higher grade underground ore as Venetia mine transitions underground. Meanwhile its Canadian output remained relatively stable at 0.7 million carats.
The company said demand for rough diamonds showed a slight recovery at the start of 2024, following the end of a voluntary moratorium on rough diamond imports into India in late 2023 and improved demand for diamond jewellery in the US. However, midstream polished inventories remain high, and cautious restocking by retailers led to a decline in demand in Q2 2024.
Rough diamond sales in Q2 2024 totalled 7.8 million carats from three Sights, compared to 7.6 million carats from two Sights in Q2 2023. The H1 2024 consolidated average realised price remained flat at $164 per carat, reflecting a larger proportion of higher value rough diamonds being sold, offset by a 20% decrease in the average rough price index compared to H1 2023.
De Beers has maintained its production guidance for 2024 at 26-29 million carats. However, due to the high inventory levels and expected slow recovery in demand, the company is considering further production reductions to manage working capital and preserve cash. Unit cost guidance for 2024 remains unchanged at approximately $90 per carat.
De Beers said it will cease announcing rough diamond Sight sales following this Q2 production report and will provide this information on a quarterly basis moving forward.