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Photo courtesy of De Beers.

DE BEERS REDUCES 2021 PRODUCTION FORECAST BY 1 MILLION CARATS DUE TO ‘OPERATIONAL CHALLENGES’

 

De Beers has revised its production forecast for 2021 to 32 million carats to 34 million carats, down from 33 million carats to 35 million carats. In a statement released to the media, the company said that this is subject to trading conditions, and is due to ongoing operational challenges and lower expected production from the final cut at its Venetia mine, in the northeast of South Africa.

Reporting on its fourth quarter 2020 results, Demand for rough diamonds showed positive trends in the fourth quarter of 2020, De Beers noted, adding that there were indications of encouraging levels of consumer demand for diamond jewelry during the holiday season in the United States, while China also performed well.

The company’s rough diamond sales during the fourth quarter totaled 6.9 million carats from two sights, compared with 6.6 million carats from three sights during the third quarter of the year, and 7.0 million carats from two sights during same final three months in 2019.

De Beers full year consolidated average realized price decreased by 3 percent to $133 per carat, down from $137 per carat in 2019. This was results of a 10 percent reduction in the average rough price index, which was partly offset by an increased proportion of higher value rough diamonds sold in 2020.

COVID PANDEMIC IMPACT FOURTH QUARTER RESULTS

Reporting on its fourth quarter 2020 results, De Beers said that rough diamond production decreased by 14 percent to 6.7 million carats, driven by continued planned reductions in response to the lower demand for rough diamonds caused by the COVID-19 pandemic and operational challenges at Orapa in Botswana, which led to lower than expected production.

COVID-19 related measures remain in place at De Beers mines to to safeguard the workforce while maintaining operational continuity.

In Botswana, production decreased by 28 percent to 4.3 million carats, driven by the planned treatment of lower grade material at Jwaneng, where production decreased by 56 percent. 

This was partly offset by a 9 percent increase at Orapa, due to a planned improvement in grade, despite a slower than anticipated plant restart in December following scheduled maintenance, as well as power supply interruptions affecting plant availability.

The Jwaneng mine Botswana. (Photo courtesy of De Beers)

De Beers Namibia production decreased by 26 percent to 0.3 million carats, as the majority of the marine mining fleet remobilized during the fourth quarter, following a complete shut down during the third quarter.

South African production increased to 1.3 million carats due to the expected improvement in ore grade from the last cut of the open pit at Venetia as the mine continues to transition to underground operations.

Production in Canada decreased by 23 percent to 0.8 million carats, as maintenance resulted in lower plant throughput.

Visitors streaming into the VicenzaOro show in 2019. The Italian Exhibition group has announced that in 2021 the one will take place in Vicenza from September 10 to 14. Its January sister event was canceled.

SOUTH AFRICAN MINE HEADS UNDERGROUND

De Beers $2 billion upgrade of its Venetia mine is expected to have a significant impact on the company’s output over the coming years. The 10-year project involves transitioning the mine from open pit to underground, thereby extending its lifespan by 23 years, through to 2045.

Situated in South Africa’s Limpopo Province, Venetia has been producing diamonds since in 1992. Its annual output currently stands at 4 million to 5 million carats.

Once the new operation comes fully on stream, Venetia’s two kimberlites will fully transitioned from open pit to underground operations. Its K02 pit’s resource is already depleted and surface mining at the K01 pit will end in in late 2021 or early 2022.

The K01 mine will be responsible for the majority of production, with a forecast average of 3.5 million carats. The K02 will produce producing roughly 1 million carats per annum.

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