Monday, October 26, 2020

Diamond production on recovery track

A production report for the first quarter ended March 31, 2017 shows an increase in rough diamond production compared with the corresponding period in 2016. 

According to the report, production in Canada increased by 290 percent to 0.6 million carats because of the contribution of Gahcho Ku├®, which reached commercial production on March 2, 2017.

The increase of 8 percent from 6.9 million carats to 7.4 million carats is according to Anglo American a reflection of the contribution of Gahcho Ku├® in Canada, as well as increases in response to improved trading conditions. 

The update on production is on course with the improvement that was recorded in the last quarter of the previous year ended September 2016. Production was registered at 6.3 million carats following a rise of 4 percent when compared to the same period of 2015. 

Production in September 2016 contrasted the number that was recorded in the second quarter of the same year as a decline of 19 percent was recorded to 6.4 million carats in comparison to the corresponding period in 2015. 

This was demonstrable of a time when the market was significantly challenged.  In fact, 2015 was a bad year for the diamond market, a difficult time which De Beers responded to with a cut in production in the second half of it. The latest results are indicative of a recovery. 

On the sales part, Anglo American reports that “Total rough diamond sales volumes in Q1 2017 were 14.1 million carats (13.7 million carats on a consolidated basis) from three Sights, compared with 8.1 million carats (7.6 million carats on a consolidated basis) from two Sights in Q1 2016. In addition, this increase reflected stronger demand in Sight 1, 2017, particularly for lower value goods in stock on December 31, 2016.” 

From the production results it is said that Botswana’s mining operations registered a marginal decline arriving at 5.2 million carats. 

“Jwaneng’s production decreased by 8 percent due to expected lower grades, partly offset by Orapa, which increased by 5 percent due to expected higher grades,” notes the production statement. This decrease is far less than the one that was recorded in 2016 between the third and second quarter of 12 percent. The decline in Botswana operations contrasts that in Namibia and South Africa where De Beers also has operations. 

Production increased by 6 percent to 0.5 million carats in Namibia which is attributed to marginally higher grade at Namdeb Holdings and in South Africa increased by 19 percent to 1.1 million carats largely due to higher grades at Venetia as well.

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