Anglo American’s De Beers reported that it had sold $545m of rough diamonds in the first sales cycle of this year after a difficult 2019. Reuters
JOHANNESBURG - Anglo American’s De Beers yesterday reported that it had sold $545 million (R7.95billion) of rough diamonds in the first sales cycle of this year after a difficult 2019.

The world’s third-largest producer of rough diamonds saw sales inching up to $545m in a sign that the industry was on a recovery trajectory following a slump in demand last year.

The rough diamond sales grew from $426m in the 10th sales cycle last year and $500m in the first sales cycle of the year.

De Beers chief executive Bruce Cleaver said: “Demand for rough diamonds increased during the first Sight of 2020 following the end-of-year selling season and subsequent inventory restocking.”

Last week, Anglo American said rough diamond sales volumes fell 8percent during the 2019 full year at 30.9millioncarats compared with 33.7millioncarats in 2018.

It said overall demand eased during the period as a result of challenges in the midstream, with higher-polished inventories and caution due to macroeconomic uncertainty.

A year earlier, the low-priced diamond product segment came under considerable pressure due to weak demand and surplus availability, the rapid depreciation of the rupee and a reduction in bank financing in the midstream.

This resulted in a surplus of low-priced polished diamonds and saw lower sales at the start of last year.

However, the year proved to be a difficult one for diamonds as the industry faced a global slump. Sales fell amid an oversupplied market owing to the ongoing trade tensions and increased sales of synthetic diamonds. Technological developments have led to the production of higher quality gem synthetics. The synthetics continue to threaten the industry.

This week Petra Diamonds chief executive Richard Duffy said that the supply discipline by the major producers in the second half of calendar 2019 had played an important role in moving towards more balance between supply and demand in the midstream, and would remain a key factor in terms of the health of the market in calendar 2020.

De Beers has a partnership with Botswana, which has one of the richest diamond mines by value in the world at Jwaneng and one of the largest by volume at Orapa.