De Beers’ production slips 10% in Q1’16

In the first quarter of 2016, production at De Beers dropped 10 percent to 6.9 million carats, as per a production update released by Anglo American. The drop in production at De Beers reflects the decision to reduce production in response to trading conditions during 2015.

However, the company’s full year production guidance (on a 100 percent basis) remains unchanged at 26-28 million carats, subject to trading conditions.

At Debswana (Botswana), production decreased by 5 percent to 5.3 million carats as a result of the strategy to align production to trading conditions. There was lower production at Orapa, partially offset by an increase in production at Jwaneng. Damtshaa (a satellite operation of Orapa) was placed on care and maintenance from 1 January 2016. Production at De Beers Consolidated Mines (South Africa) dropped 12 per cent to 932,000 carats, driven by the completion of the sale of Kimberley mines to Ekapa Minerals, as announced in Januray this year.

Namdeb Holdings (Namibia) recorded a 4 percent decline in diamond production to 444,000 carats due to reduced grade at Namdeb. De Beers Canada recorded production of 162,000 carats or a 68 percent decline, due to Snap Lake being placed on care and maintenance.

The company noted that the consolidated rough diamond sales of 7.6 million carats in Sights 1 and 2 of 2016 reflected an improvement in trading conditions relative to H2 2015. Sales volumes were 10 per cent lower than in Q1 2015, however this was due to the number of Sights in the respective periods: two Sights in Q1 2016 vs. three Sights in Q1 2015.