De Beers boosts Anglo American

• As Debswana mines diamond output surge in 2021
• De Beers total revenue increased to $5.6 billion
• Anglo upbeat Jwaneng Cut-9 will drive De Beers growth

BAKANG TIRO

editors@thepatriot.co.bw

Mining giant Anglo American has revealed in its 2021 Annual Report that profit attributable to equity shareholders increased significantly to $8.6 billion compared to $2.1 billion in year 2020.

The company said improved operational performance was noted on the Platinum Group Metals (PGMs) with De Beers and Kumba (Iron Ore) contributing to a 5% increase on a copper equivalent basis.

This was driven in part by the easing of certain Covid19 related restrictions that impacted have production throughout 2020 as well as  improved mining performance and processing stability at PGMs.

Furthermore, the company that owns 85% stake in De Beers has planned higher rough diamond production at De Beers in response to strong consumer demand and improved availability at Kumba.

In 2021, De Beers’ total revenue increased significantly to $5.6 billion compared to $3.4 billion in 2020. The rough diamond sales rose to $4.9 billion (2020:$2.8 billion) driven by positive sentiment and strong demand in key consumer markets.

“With midstream capacity recovering, despite the second wave of Covid-19 infections in India in the second quarter of 2021, on a consolidated basis, the rough diamonds sales were significantly higher at 33.4 million carats (2020:21.4 million carats), Anglo said on De Beers performance.

The average realised price rose by 10% to $146/ct (2020:$133/ct), primarily as a result of positive market sentiment, which gave rise to an 11% strengthening of the average rough price index.

Anglo American said revenue also increased within De Beers’ other businesses, including Element Six.

“Underlying EBITDA increased to $1, 100 million (2020:$417 million) reflecting the improvement in sales driven by the recovery in demand. Unit costs were broadly flat at $85\ct (2020:$57ct), as the benefit of higher production volumes was offset by an increase in input costs and favorable exchange rates,” said Anglo.

Moreover, De Beers’ capital expenditure increased by 48% to US $565 million compared to $381 million in 2020, as spend returned to more normalised level after the deferral of sustaining projects during 2020 in response to the Covid-19.

“The execution of Venetia Underground (in South Africa) and Jwaneng Cut-9 (in Botswana) life extension projects continued to progress and the Namibian land operations was also approved during the year. The new AMV3 vessel for Namibia, now named the Benguela Gem (the largest and most advanced diamond recovery vessel ever built), arrived in Cape Town in September 2021 to complete preparations for commissioning in the first quarter of 2022,” said the report.

Botswana Production

In Botswana, Anglo said production was 35% higher at 22.3 million carats compared to 16.6 million in 2020, as production was increased in response to stronger prevailing diamonds demand.

Production at Jwaneng Debswana mine increased by 71% to 12.9 million carats (2020: 7.5 million) due to the planned treatment of higher grade ore, and as result of Covid19 related lockdowns in 2020.

Production at Orapa increased marginally by 5% to 9.4 million carats (2020:9.0 million carats), despite the impact of heavy rainfall in the beginning of the year and planned closure in plant in late 2020.

Meanwhile, In South Africa production increased by 41% to 5.3 million carats compared to the 3.8 million carats in 2020, owing to the impact of Covid-19 lockdowns in the first half of 2020 and the planned processing of higher grade ore from the final cut of the Venetia pit as well.

“In Canada, production was marginally lower at 3.2 million carats (2020: 3.3 million carats), mainly due to temporary Covid-19 related shutdown in the first quarter of 2021,” said Anglo.