De Beers Q1 production increased by 15%
By Aubrey Lute
Diamond group De Beers has released a report indicating that its total production had increased by 15% to 8.5-million carats during the first quarter of this year (2018). This rise in output was largely credited by the Group to the ramp-up in production at the Gahcho Kué project in Canada and greater production at the Orapa operation in Botswana.
Debswana, a 50:50 joint venture with the Botswana government saw production rise 12% to 5.8-million carats. Output at the Orapa operation jumped 26% to 2.8-million carats. This was the result of an increase in the amount of ore treated, which, in turn, was the result of, according to the Group’s statement, “sustained healthy trading conditions”. Debswana is the world’s number one diamond producer in terms of value and the world’s number two in terms of volume.
In its 2017 results announcement the Anglo American subsidiary reported a production guidance of 34-million carats to 36-million carats, which compares with 33.45-million carats produced in 2017. "Improving global macroeconomic conditions remain supportive of consumer demand growth for polished diamonds in 2018," De Beers had said at the time. The company this week also announced that full year production guidance remains unchanged at 34-36 million carats, subject to trading conditions.
Although it noted that the degree of global economic growth would be dependent on a number of factors, including the extent of the positive impact on consumer spending growth from US tax cuts “Rough diamond production increased by 15% to 8.5 million carats reflecting the ramp-up of production from Gahcho Kué in Canada, which reached nameplate capacity in Q2 2017, and increased production from Orapa in Botswana (Debswana) in response to the sustained healthy trading conditions,” reads the De Beers statement.
Meanwhile in Namibia (Namdeb Holdings) production increased by 12% to 0.5 million carats as a result of accessing consistently higher grades at the land based operations. In South Africa (DBCM) production was in line with Q1 2017 at 1.1 million carats. Canada production increased by 69% to 1.1 million carats due to the ramp-up of Gahcho Kué, which reached nameplate capacity in Q2 2017.
Total rough diamond sales volumes in Q1 2018 were 8.8 million carats (8.4 million carats on a consolidated basis) from two Sights, compared with 14.1 million carats (13.7 million carats on a consolidated basis) from three Sights in Q1 2017.
In addition to the difference in the number of Sights over the period, Sight 1 2017 also saw an unusually strong demand for lower value goods following the effects of Indian demonetisation in Q4 2016, leading to higher than normal sales volume.
Anglo production report
In its Production Report for the first quarter ended 31 March 2018 Anglo American reports a 4% increase in total production on a copper equivalent basis in the first quarter of 2018, compared to the same period of 2017. Mark Cutifani, Chief Executive of Anglo American,said: “Our operations have made a solid start to 2018, delivering a 4% increase in total production. This reflects our consistent focus on driving efficiency across our portfolio and continuing our strong performance of Q4 2017 despite the suspension of operations at Minas-Rio.”
Copper production increased by 9% to 154,900 tonnes with strong operational performance and higher grade at Los Bronces and improved plant performance at Collahuasi. Platinum production increased by 7% and palladium by 9% due to improved operational performances across the portfolio. The sale of Union mine was completed on 1 February 2018. Kumba Iron Ore production increased by 4% to 10.9 million tonnes driven by improved productivity at Kolomela
Minas-Rio production decreased by 30% to 3.0 million tonnes primarily as a result of the suspension of the operation following a leak in the pipeline that carries iron ore slurry from the mine to the port. Metallurgical coal production increased by 6% due to performance improvements at Moranbah and the continued ramp-up of Grosvenor.
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Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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Moody’s Reaffirms African Trade Insurance’s A3 Rating & Revises Outlook to Positive
Moody’s Investors Service (“Moody’s”) has affirmed the A3 insurance financial strength rating (IFSR) of the African Trade Insurance Agency (ATI) for the fifth consecutive year and changed the outlook from stable to positive.
Moody’s noted that the change in outlook to positive reflects the strong growth in ATI’s membership base – that has resulted in improved portfolio diversification, strengthened capital adequacy, and the good profitability despite the challenging operating environment. In addition, ATI benefits from its preferred creditor status (PCS) amongst sovereign member states which protects it from the risk of default by member sovereigns through securing recoveries against claims paid on guarantees.
The strong membership and equity growth are some of the key considerations for the consistent reinstatement of ATI’s A/Stable rating by Standard & Poor’s and Moody’s rating, over the years. Also supporting the rating affirmation are; consistent improvement in financial performance, commitment of its shareholders who continue to uphold the preferred creditor status, its high quality and conservative investment portfolio as well as strong relationships with a number of global reinsurers that provide significant risk-bearing capacity.
With the change in outlook to “positive”, ATI is now better placed to provide enhanced support to its member countries, attract additional shareholding and grow its portfolio. The positive outlook is an indication that if ATI continues to demonstrate its strong underwriting performance and ability to recover claims under the preferred creditor arrangements, among other factors, an upward pressure towards an upgrade may be generated. The Moody’s press release can be accessed from here
Commenting on the rating, Africa Trade Insurance Chief Executive Officer Manuel Moses said: “This positive revision is in line with our 2023 – 2027 strategic objectives in which we set to improve our rating outlook to positive in the first year, and achieve an upgrade of at least “AA”/Stable rating by both Moody’s and S&P within this Strategic Plan period. We aim to achieve this by doubling our exposures and increasing our capital to more than USD1 billion.”
ATI’s mandate is to provide trade-credit and political risk insurance, as well as other risk mitigation products to its member countries and related public and private sector actors. These insurance products not only directly encourage and facilitate foreign direct investment as well as local private sector investment in our member countries, but also contribute to intra- and extra-African trade.
About The African Trade Insurance Agency
ATI was founded in 2001 by African States to cover trade and investment risks of companies doing business in Africa. ATI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. Since inception, ATI has supported US$78 billion worth of investments and trade into Africa. For over a decade, ATI has maintained an ‘A/Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s, and in 2019, ATI obtained an A3/Stable rating from Moody’s, which has now been revised to A3/Positive.