De Beers’ rough diamond sales in H1 stand flat

The first half of 2013, closing on June 30, noted that its rough diamond sales were almost flat, and as Philippe Mellier, CEO of De Beers Group, ‘trading conditions remained challenging for our rough market partners’. The sales of rough diamonds stood at $3.0 billion (the same in the six months alst year were also at $3.0 billion). The prices of rough diamonds rose in the current year’s first half by 6 percent after facing a 12 percent drop in the second half of 2012. Mellier added that “In the first half of 2013, De Beers’ rough diamond prices recovered some of the losses experienced in second half of 2012, with an improved product mix offsetting the lower price index. Overall sales including De Beers’ Forevermark brand and Element 6 technology unit, stood at $3.3 billion.

The average realized price was 2 percent higher than prices achieved in the same period in 2012 as an improved product mix more than offset the lower price index.

The mining giant also noted that demand in key consumer markets varied. The USA exhibited encouraging growth, while China saw a slower pace and was somewhat patchy. Polished prices edged up on the back of moderate retailer re-stocking, but high cutting centre stock, tight midstream liquidity and a weakening rupee continued to create challenges for the rough market.

De Beers’ half-year production increased by nearly one million carats to 14.3 Mct (30 June 2012: 13.4 Mct) owing to improved ore grades at Orapa and Jwaneng Mines.

For the six months aheade, De Beers is positive that despite the fragility of the global economic recovery, macro-economic conditions are generally supportive of global growth in the polished diamond market in 2013 at levels slightly above 2012. Also, it anticipates full-year production will recover to be broadly in line with 2012 subject to market conditions.

De Beers’ underlying operating profit contribution to Anglo American increased by $322 million to $571 million, driven primarily by Anglo American’s increased shareholding from August 2012.