Diamonds are displayed during a visit to the De Beers Global Sightholder Sales (GSS) in Gaborone
Diamonds are displayed during a visit to the De Beers Global Sightholder Sales (GSS) in Gaborone

De Beers reports surge in rough diamond sales

By Dineo Faku Time of article published Oct 15, 2020

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JOHANNESBURG - The world's leading diamond company, De Beers, yesterday reported a surge in rough diamond sales during the eighth sales cycle, signalling green shoots in the demand for rough stones.

The Anglo American plc subsidiary said sales from the eighth cycle period, between September 21 and October 9, rose 40percent to $467million (R7.7billion) from $334m in the seventh sales cycle.

The eighth sales cycle a year earlier was $297m. De Beers said it continued to implement a more flexible approach during the eighth sales cycle, with the sales event extending beyond its normal week-long duration given the restrictions on the movement of people and products in various jurisdictions.

Chief executive Bruce Cleaver said the group had continued to see a steady improvement in demand for rough diamonds in the eighth sales cycle of the year, with cutters and polishers increasing their purchases as retail orders came through ahead of the key holiday season.

“It’s encouraging to see these demand trends, but these are still early days, and there is a long way to go before we can be sure of a sustained recovery in trading conditions,” said Cleaver.

De Beers, which is 85percent owned by Anglo American plc, was hit hard by the travel restrictions implemented in March to reduce the spread of the Covid-19 pandemic. The restrictions saw the group calling off its April rough diamond sales cycle, leading to a 54percent fall in production to 3.5million carats during the second half. Southern Africa saw its consolidated sales for the second quarter falling to $56m from $1.3billion a year earlier, driven by lower volumes and prices.

During the first half of this year, average prices fell 21percent to $119 a carat from $151 a year earlier, driven by a higher proportion of lower value diamonds sold and an 8percent reduction in the average rough price index.

Meanwhile, reports emerged that diamond exports from India, which polishes about 90percent of the world’s rough diamonds, would collapse by as much as a quarter this year as the pandemic crushes demand and breaks supply chains.

According to media reports, Colin Shah, chairperson of the Gem & Jewellery Export Promotion Council, overseas sales of cut and polished diamonds may slump 20 to 25percent in the year to the end of March from $18.66bn last year.

BUSINESS REPORT

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