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De Beers Adjusts Production Forecast for 2024

London—De Beers Group reported a notable decline in diamond production, down by 23 percent in the first quarter, prompting the company to revise its annual guidance downwards. This adjustment comes amidst persistent oversupply issues in the market and a sluggish rough diamond sector.

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The first-quarter production report, released on Wednesday, revealed a downturn in production across all countries where De Beers operates, except Namibia.

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In Botswana, which represents over 70 percent of the company’s yearly output, production plummeted to 5 million carats in the first quarter, marking a 28 percent decline from 6.9 million carats in Q1 2023. De Beers deliberately scaled back operations at Jwaneng in response to market conditions, focusing instead on processing existing surface stockpiles at Orapa.

South Africa also experienced a 19 percent year-over-year decrease in production, dropping from 739,000 carats to 598,000 carats. De Beers attributed this decline to its continued extraction of lower-grade surface stockpiles, while its Venetia mine, the sole remaining operation in South Africa, gears up for the transition to underground production.

Meanwhile, production in Canada dipped by 4 percent to 645,000 carats but saw a marginal 2 percent increase in Namibia, reaching 633,000 carats.

De Beers highlighted the cautious stance of sightholders in recent rough diamond sales, indicating a reluctance to make substantial purchases. First-quarter 2024 sales totaled 4.9 million carats from two sights, a stark decrease from the 9.7 million carats sold across three sights in Q1 2023. However, this figure represented an improvement from the 2.8 million carats sold during two sights in Q4 2023.

The consolidated average realized price experienced a notable uptick, rising by 23 percent to $201 per carat. This increase reflects a shift towards higher-value rough diamonds in the sales mix, alongside De Beers’ strategic price adjustments, which stimulated demand for premium goods.

De Beers anticipates a gradual recovery in rough diamond sales throughout the year. Consequently, the company has revised its production guidance for 2024 to a range of 26-29 million carats, down from the initial projection of 29-32 million carats, signifying a 9-10 percent adjustment.

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