The diamond mining juggernaut, De Beers, reported improved sales in its latest sales cycle, thanks to increased demand from one of its key market China, reopening after stringent Covid-19 protocols.
During the third sales cycle of the year held from 27 March to 11 April in Gaborone, De Beers fetched $540 million for its rough diamonds, higher than the previous two sights of the year. However, the sales figure is 4.6 percent lower than what the diamond mining company got in last year’s third sales cycle, continuing the trend witnessed in the other two sights of the year.
De Beers’ first sales cycle of 2023 brought in $454 million, a decline of 31 percent from the same period in 2022, while the second sight raked in $497 million – 24 percent lower than 2022’s second sales cycle that netted $652 million.
“We have continued to see good demand for our rough diamonds over the third sales cycle of the year as we move into the second quarter of 2023,” said Al Cook, De Beers’ new chief executive officer who took over from Bruce Cleaver in February.
“Sales were in line with expectations and we continue to see some encouraging positive trends in consumer demand for diamond jewellery, not least in China where we’re beginning to see some signs of recovery in consumer confidence following the relaxation of travel restrictions.”
While uncertainty is building up in the diamond trade, De Beers last year broke its six year old record after rough diamond sales soared. Through its subsidiary, De Beers Global Sightholder Sales (DGSS), the mining company hosts rough diamond sales 10 times a year that are also known as ‘Sights’. DGSS sells around 90 per cent of De Beers Group’s rough diamonds, by value, via term contracts to customers. The other 10 percent is sold via De Beers Group Auctions.
Last year, De Beers earned $5.67 billion from the ten rough diamonds Sights, surpassing the 2016 record of $5.6 billion. The higher sales record follows what has been a strong recovery in the diamond industry, improving on 2021’s $4.82 billion, that eclipsed the $2.79 billion earned in 2020 after COVID-19 roiled the diamond industry, reducing the gains made in 2019 after the diamond miner sold $4 billion worth of rough diamonds. In 2018, De Beers ten sales cycle earned $5.39 billion and $5.31 billion in 2017.
De Beers’ rough diamond production in 2022 increased to 34.6 million carats, up from 2021’s 32.3 million carats, reflecting strong operational performance and higher planned levels of production to meet continued strong demand for rough diamonds, particularly in the first half of the year.
De Beers gets its load from Botswana, Canada, Namibia and South Africa. In Botswana, which supplies the mining giant with 70 percent of rough diamonds, production increased by 8 percent to 24.1 million carats, up from the prior year’s 22.3 million carats.
Namibia production increased by 46 percent to 2.1 million carats. South Africa production grew by 4 percent to 5.5 million carats. Production in Canada decreased by 11 percent to 2.8 million carats. With increased production output and sales, De Beers’ revenue climbed to $6.6 billion, up from 2021’s $5.6 billion. In the end, De Beers reported a profit of $1.4 billion, an increase of 29 percent from 2021’s profit of $1.1 billion. The 2022 earnings are the highest since 2014, when De Beers’ revenue hit $7.1 billion and delivered almost $1.4 billion in profit.