Tough economic conditions in China and India cut rough diamond sales by De Beers by 80% from a year ago as the company continued to keep stones off the market, revenue figures show.
De Beers, a unit of Anglo American (LSE: AAL), reported US$80 million in sales for the Oct. 4-Nov. 3 period, known as the ninth cycle, down from US$454 million in the same cycle last year, the company said in a news release on Nov. 8.
Sales were $200 million in the eighth cycle, De Beers said. There are 10 cycles in a year. The company sells diamonds to its group of jewellery, industrial and other clients, which it calls Sightholders, in direct sales and auctions.
“The retail recovery in China remains slow,” De Beers CEO Al Cook said in the release. “And the voluntary import moratorium on rough diamonds into India will see extended Diwali holidays and factory closures in the world’s largest diamond cutting centre.”
The company reduced the availability of rough diamonds in this year’s ninth cycle, but it wasn’t immediately clear by how much.
“De Beers maintained support for its Sightholders with full purchase flexibility as the midstream re-establishes an equilibrium between wholesale supply and demand,” Cook said.
Sanctions
The European Union is slated to debate more sanctions against Russia next week but a plan to ban its diamonds may slip from a targeted start on Jan. 1 to later in the first quarter as officials consider methods to trace stones, Reuters reported.
The United States has blocked imports from Russian state miner Alrosa (MCX: ALRS), which vies with De Beers as the world’s largest producer by carats, but the E.U. hasn’t.
De Beers said its rough diamond output fell 23% in the quarter to Sept. 30 to 7.4 million carats from 9.6 million carats in the year earlier period as it moved production underground at its Venetia open-pit mine in South Africa.
Venetia, a kimberlite mine running for 30 years, has historically contributed 40% of the country’s output from its location in the north near the borders of Botswana and Zimbabwe.
De Beers operates the Letlhakane and Orapa mines in Botswana, the Gahcho Kué mine in northern Canada, and recovers diamonds along Namibia’s coast and offshore.
In recent years, De Beers shut its Voorspoed mine south of Johannesburg, its Snap Lake mine near Gahcho Kué and its Victor mine in northern Ontario.
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