De Beers records strong recovery in Q12021
Rough diamond sales grow to $2.6 billion
De Beers optimistic on Jwaneng Cut9 project
BAKANG TIRO
editors@thepatriot.co.bw
Strong rough diamond sales driven by a robust diamond demand since the beginning of the year contributed to significant growth of the blue chip diamond company, De Beers in the first half of 2021.
De Beers Group revealed on Thursday during half year financial results announcement that total revenue increased significantly to $2.9 billion equated to $1.2 billion posted on 30th June 2020.
Paul Rowley, De Beers’ Executive vice president, Diamond Trading, said rough diamond grew by $2.6 billion (30 June 2020 $1.0 billion) driven by the robust rough diamond demands as the mainstream pulled through stocks in response to the recovery consumer demand during the period.
“Rough diamond sales volumes significantly higher at19.2 million carats (30 June 2020: 8.5 million carats). The average realized the price rose by 13% to $135/ct (30 June 2020: $119/ct), driven by a larger proportion of higher value rough diamonds. The closing price index was14% above the opening index over the first six months of 2021, reflecting positive consumer demand for diamond jewellery as well as tightness in inventories across the diamond value chain,” stated Rowley.
De Beers says that the underlying EBITDA increased to $610 million compared to $2 million in 30 June 2020, broadly returning to the 2019 levels, owing to the recovery in the diamond sales.
“Unit costs were lower than in the first half of 2020 at $59/ct (30 June 2020: $62/ct), as the benefit of higher production was primarily offset by unfavorable exchange rates. The Capital expenditure increased by 29% to $205 million (30 June 2020: $159 million), largely due to a reduction of sustaining projects during 2020 in response to Covid-19. The Venetia Underground and Jwaneng Cut-9 life-extension projects continued to progress and the new AMV3 vessel for Namibia remains on track for commissioning in 2022,” said De Beers upbeat on further growth.
Executive vice president commercial and partnerships Alessandra Berridge said the company will continue to invest in key projects to expand its production capacity through the Jwaneng Cut 9 project.
Berridge noted that De Beers is committed to supporting Botswana’ s economic recovery from the pandemic adding that major owners of the company, Anglo American is keen to support too.
“De Beers in collaboration with Debswana Mine and Diamond Trading Company (DTCB) made a contribution of P55 million to supporting the government in terms of the vaccine rollout. For us to be part of the largest corporate group being Anglo American is assisting us in our concerted efforts to support the economic growth in the countries where we operate such as Botswana and Namibia extending across the SADC region. We are keen to work with government of Botswana,” she said.
Commenting on the outlook, Rowley said the strong recovery in consumer demand is expected to continue in the second half of the year with midstream capacity increase expected to increase.
According to him, the midstream capacity Q2 will grow subject to the Covid-19 situation in India.
He noted that the consumer demand exceeded pre pandemic levels in United States of America (USA) world largest market for diamond jewellery reporting robust double digit on the 2019 levels.
In Botswana, De Beers said that production was 43% higher at 10.7 million carats (30 June 2020: 7.5 million carats) as production was increased in response to the stronger prevailing demand.
“The production at Jwaneng mine increased by 44% to 6.3 million carats (30 June 2020: 4.3 million carats), and the production at Orapa mine increased by 41% to 4.4 million carats (30 June 2020: 3.1million carats), despite the impact of heavy rainfall at the beginning of the year,” the Group said.
In Namibia, production decreased by 22% to 0.7 million carats (30 June 2020: 0.9 million carats) due to planned maintenance of the Mafuta crawler vessel and the continued demobilisation of another vessel.
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