DE BEERS, the world’s biggest diamond producer by volume, saw an 18 percent increase in rough diamond sales during its second sales cycle of 2022 compared to the prior year boosted by consumer demand.
Bruce Cleaver, chief executive, De Beers, said: “The second sales cycle of the year saw the continuation of robust rough diamond demand underpinned by sustained positive consumer sentiment.
De Beers, a subsidiary of Anglo American, said yesterday that it had sold $650 million (R9.9 billion) rough diamond sales in the second sales cycle of 2022, compared with $550m in the second cycle of 2021, but less than $660m in the first cycle of the year.
Cycle 2 represented provisional sales value as at March 8, whereas cycle 1 actual sales value represented sales between January 17 and February 1.
De Beers said owing to the restrictions on the movement of people and products in various jurisdictions around the globe the group had continued to implement a more flexible approach to rough diamond sales during the second sales cycle of 2022, with the Sight event, or auction, extended beyond its normal week-long duration.
As a result, the provisional rough diamond sales figure quoted for Cycle 2 represented the expected sales value for the period February 21 to March 8 and remained subject to adjustment based on final completed sales.
Announcing the auction results, Cleaver said: “We have been shocked and saddened by the war in Ukraine, and our hearts go out to the Ukrainian people. De Beers will donate $1 million to aid organisations that are operating in the region and providing support to those affected by the war."
It remains to be seen how the Ukraine war effects De Beers.
BR could not get comment from Anglo American by the time of going to print.
In Anglo American’s results for the year ended December, pre the Ukraine-Russian war the company issued a sparkling outlook.
At the time it said the growth in consumer demand for diamond jewellery was expected to continue, driven by the US, primarily due to continued economic recovery, higher accumulated savings and postponed marriages.
De Beers has said rough diamond production had increased by 29 percent to 32.3 million carats (2020: 25.1 million carats) primarily due to the lower levels of production in 2020 as a result of the impact of Covid-19 related lockdowns and lower demand due to the pandemic.
It flagged: "While there continue to be risks relating to the effects of Covid-19 across the pipeline, geo-political uncertainty and cost inflation pressures, sentiment in the midstream is expected to remain positive on the back of anticipated strong US retailer restocking in the first quarter.“
However, since then inflation has rocketed in the US.
Reuters reported this week that Russia's invasion of Ukraine has dashed any hope US consumers might have had for relief from sky-rocketing inflation, with petrol prices in the last week surging by the most in nearly 17 years and costs of other goods like food ready to march higher as well.
Furthermore, its main rival, Russian firm Alrosa, one of the biggest suppliers of rough diamonds worldwide, is now effected by the US imposing sanctions on Russia, which could disrupt the gem trade.
Around 30 percent of the world’s rough diamonds come from Russia, 90 percent of which are mined by Alrosa.
Last Friday Alrosa suspended its membership in the Natural Diamond Council, a market alliance of the world’s leading producers of precious stones.
The diamond jewellery industry is going into the year with diamond supply at historically low levels, estimated by Bain & Company at 29 million carats in 2021 and as upstream inventories declined by 40 percent.
philippa.larkin@inl.co.za
BUSINESS REPORT ONLINE