De Beers to Offer More Rough to African Factories
De Beers plans to allocate more of its rough to manufacturing units in Africa next year, according to sightholders, resulting in less supply for other cutting operations amid a drop in the miner’s overall output.
A greater proportion of De Beers’ diamonds will go to manufacturers in Botswana, Namibia and South Africa in 2023, the sightholders told Rapaport News last week, noting that the move rerouted goods that would previously have gone to international manufacturers — mainly India. The change is part of the miner’s efforts to boost producing countries’ local diamond industries — a system known as beneficiation.
De Beers has mines in all three of the above-mentioned African nations, as well as in Canada, and it has added one new sightholder — Molefi Letsiki Diamond Holdings — in South Africa, a company spokesperson said Friday.
“Beneficiation continues to play an increasingly important role in our approach, and we continue to prioritize supply for cutting and polishing in producer countries,” he commented.
Units in Botswana — which has around 40 cutting factories — will also receive smaller rough stones than before. While they previously processed mainly 2-carat rough and larger, sightholders now say they expect De Beers to allocate more higher-quality, 1- to 2-carat goods for polishing in the country.
The adjustment is part of a progression toward manufacturing more De Beers goods in Africa, and comes amid the miner’s negotiations with Botswana over a new sales contract. Those talks have seen several delays, with some speculating that the government wants a better deal for the country’s large, high-value diamonds.
“[De Beers] will have sold approximately $1 billion this year [to factories in producing nations],” a sightholder estimated. “I think you can safely add another 20% [for next year].”
The miner informed clients of their 2023 allocations earlier this month. It declined to comment on the specifics.
De Beers is anticipating a drop in production next year to between 30 million and 33 million carats, down from around 34 million carats this year. Parent company Anglo American announced this 2022 figure at an investor event on Friday, having previously predicted a broader range of 32 million to 34 million carats.
It also reduced its output plan for 2024, forecasting a total of 29 million to 32 million carats instead of its earlier estimate of 30 million to 33 million. The transition of the Venetia mine from open-pit to underground has affected company production, with the ramp-up to full output at the South Africa site in 2023 set to take longer than expected, the company explained. Production for 2025 will range from 32 million to 35 million carats, it predicted.
“Lower production volume would inevitably have some impact on the overall rough-diamond availability next year,” the De Beers spokesperson said.
Image: An employee at sightholder Almod Diamonds viewing a polished stone in Windhoek, Namibia. (Ben Perry/Armoury Films/De Beers)