De Beers Sees Production Slip 5% in Q3

London—De Beers’ volume of rough diamonds recovered fell 5 percent year-over-year in the third quarter as it purposefully cut back production in South Africa and Botswana.

The diamond company recovered 8.7 million carats of rough in the third quarter 2018, compared with 9.2 million in the prior-year period.

The company’s largest division, Debswana, De Beers’ joint venture with the government of Botswana, recorded a drop of 6 percent to 5.7 million carats due to planned processing of lower grades at Jwaneng.

Production at Orapa, Letlhakane and Damtshaa was flat year-over-year.

In South Africa, De Beers Consolidated Mines (DBCM) saw production fall 14 percent to 1.3 million carats as the company shut down the processing plant at the Venetia mine ahead of the mine’s transition from open pit to underground.

Venetia will be the company’s sole remaining diamond mine in South Africa after the planned closure of Voorspoed in 2019. De Beers is investing $2 billion to take Venetia underground and extend its life into the 2040s.

Meanwhile, production rose in both Namibia, which was up 1 percent to 460,000 carats, and Canada, up 5 percent to 1.2 million carats of rough recovered.

The Canadian Victor mine, which is also approaching the end of its life, produced higher grades, meaning there was a greater caratage of diamonds per ton of material recovered. Production at Gahcho Kué was flat compared with the third quarter 2017.

De Beers’ latest mining figures were published Tuesday as part of the overall Q3 production report for parent company Anglo American, which also mines platinum, palladium, nickel, copper, coal, and iron and manganese ore.

Year-to-date, De Beers has mined 26.2 million carats of rough diamonds, up 3 percent from 25.3 million in 2017.

Its division in South Africa, DBCM, was the only segment to post a year-to-date decline in the number of carats mined, with production there dropping 15 percent.

Year-to-date, mining is up 4 percent in Botswana, 14 percent in Namibia and 24 percent in Canada.

Full-year production guidance remains unchanged at 34-36 million carats, though De Beers noted Tuesday that it expects to land at the upper end of that range.

Rough sales volumes totaled 5 million carats from the two sales cycles in the third quarter, down from 6.9 million carats in the same period last year. Rough sales dropped because De Beers let sightholders put off purchasing some lower-value goods