De Beers is considering lowering its output for the full year in an effort to save money, citing a weak market and oversupply. 

“With higher-than-normal levels of inventory remaining in the midstream and an expectation for a protracted recovery, we are actively assessing options with our partners to further reduce production to manage our working capital and preserve cash,” the company said Thursday. 

For now, the miner has maintained its output forecast of 26 million to 29 million carats for 2024, it noted. 

Sales value slipped in the second quarter on a consolidated basis, which excludes rough sales by joint-venture partners, as high levels of polished inventory and sluggish demand drove down prices for the company’s rough. The decline came despite a 3% rise in sales volume to 7.8 million carats and the addition of a third sight, compared to only two during the same period a year earlier. During the quarter, the average price fell 13% to $142 per carat. 

Production dropped 15% to 6.4 million carats, as the company reduced output from its Jwaneng mine in Botswana to process existing lower-grade surface stockpiles. Production at De Beers’ Debmarine project in Namibia also faltered amid planned vessel maintenance. An 8% increase in output from the Venetia mine in South Africa, reflecting the processing of larger volumes of higher-grade ore as the mine transitions underground, partially offset those declines. 

Sales for the first half of 2024 slid 26% to 12.7 million carats. The average selling price grew 1% to $164 per carat as the product mix skewed toward higher-value rough, the company explained. The slight rise was mainly the result of a peak in the first quarter. “Demand for rough diamonds recovered slightly at the start of 2024 following the cessation of the voluntary moratorium on rough-diamond imports into India in late 2023 and improved demand for diamond jewelry in the US,” De Beers said. First-half production plunged 19% to 13.3 million carats. 

Meanwhile, the company’s rough-price index, which tracks like-for-like pricing, decreased 20% year on year as an average for the six months. This was the result of “midstream polished inventories remaining higher than normal and continued cautious restocking from retailers, [with] demand for rough diamonds deteriorating in the second quarter,” the miner noted. “Market conditions are expected to reflect a protracted recovery in demand,” it added. 

Image: Rough diamonds. (De Beers)