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De Beers 3Q Production Drops 27%
Confirms FY Guidance of 29M Cts
Oct 22, 2015 4:16 AM
By Rapaport News
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RAPAPORT... De Beers rough diamond production fell 27 percent year on year to 6.012 million carats during the third quarter following a decision to reduce output “to better reflect current trading conditions.”
The company has seen a sharp drop in rough sales in 2015 as demand from China slowed resulting in a backlog of polished diamond inventory held by diamond manufacturers.
“With the seasonally strong holiday season approaching, the demand outlook remains uncertain due to the ongoing slowdown in China and a sustained credit squeeze on Indian cutters,” analysts at VTB Capital wrote following ALROSA’s production report yesterday.
In August, De Beers lowered its full-year production guidance to between 29 and 31 million carats and on Thursday said it now expects output to be at the lower end of that estimate. Production for the first nine months of the year is down 11 percent to 21.64 million carats.
The bulk of the third quarter decline came from Debswana, De Beers mining joint venture with the Botswana government, where output dropped 35 percent to 4.074 million carats. Planned maintenance at the Jwaneng and Orapa mines is being prioritized in light of current trading conditions, while there is also a focus on waste mining and processing lower grade material at Jwaneng, parent Anglo American explained in a press release October 22. Production at Jwaneng, considered De Beers flagship mine, slumped 42 percent to 1.936 million carats during the quarter.
De Beers Consolidated Mines in South Africa saw output decline by 8 percent to 1.036 million carats resulting from processing lower grades at the Venetia mine.
De Beers registered an increase at its Namibia and Canada operations with Namdeb’s production up 4 percent to 466,000 carats due to higher volumes from its marine operations. De Beers Canada posted an 11 percent rise to 436,000 carats due to improved grades at the Snap Lake mine.
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Tags:
Botswana, De Beers, Debswana, Namibia, Production, Rapaport News, South Africa
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