The diamond industry is mounting a recovery as the demand for the shiny stones continues to be strong as consumers splurge on luxury goods amid a pandemic that has caused uncertainty worldwide.
The diamond mining behemoth De Beers this week announced another round of strong rough diamond sales in the company’s sixth sales cycle of the year, selling diamonds worth $510 million, higher than the previous cycle that netted $477 million.
De Beers, which is 85 percent owned by Anglo American and 15 percent by Botswana government, sells rough diamonds through ten Global Sightholder Sales and Auction Sales held every year in Gaborone, with the sights or auction sales restricted to its top 80 Sightholders who buy the diamond packages at a price determined by the company.
When diamond sales slumped to record lows last year, De Beers broke from tradition and made several concessions that included temporarily moving away sights from Gaborone due to Covid-19 travel restrictions and use of the flexible approach that extends the sights beyond the normal week-long duration to now two weeks.
“Our sixth sales cycle of the year has seen the continuation of good demand for rough diamonds, driven by strong demand for diamond jewellery in the key US and China consumer markets,” said Bruce Cleaver, CEO of De Beers Group.
“With the ongoing strength in consumer sales of diamond jewellery, the outlook remains positive for the second half of the year, subject to the risks that the pandemic continues to present across the globe.”
He said global consumer demand for diamonds continued to recover from the impact of Covid-19, supported by fiscal stimulus in the US and the roll-out of Covid-19 vaccines.
“Restrictions on international travel and entertainment over the course of the pandemic resulted in higher discretionary spending on luxury goods, including diamond jewellery.”
The strong sales in the first half of the year saw De Beers raking in $3 billion from the six sales cycles, and with only four sales cycles left, the top world diamond producer by value has passed the $2.79 billion earned in all of the ten sales cycles of 2020 and will likely outperform the $4 billion earned in 2019.
The robust rough diamond demand this year could push the company to levels close to the $5.39 billion sales recorded in 2018 and $5.31 billion in 2017. De Beers’ is yet to top the record setting $5.6 billion reached in 2016.
According to latest financials released on Wednesday, De Beers total revenue increased significantly to $2.9 billion for the six months ended June 2021, with rough diamond sales volumes significantly higher at 19.2 million carats compared to last year’s 8.5 million carats in the corresponding period.