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De Beers reports two successive monthly sales increases

Anglo American’s De Beers, the world's largest diamond producer by value, says it recorded sales of $610m in its second sale of the year compared with $545m in the first sale indicating a turnaround in rough demand since the final months of last year.

This week, De Beers reported rough diamond sales increased in the second cycle of 2016 as demand continued to show signs of improvement. Sales in the first cycle in January were revised to $545 million.

The sales figure includes the sight in Gaborone, Botswana, which took place February 22 to 26, as well as auction sales and supply to beneficiation and government partners.

De Beers, which is 85% owned by Anglo American and has been retained as one of the core pillars in the company, said diamond demand continued to show signs of improvement as excess inventory has continued to work through the system in recent months.

“Retailer restocking after the end-of-year holiday season is supporting demand for polished diamonds and, in turn, we are seeing improved demand from the midstream for rough diamonds. However, we remain mindful of the need for a cautious approach as the recovery continues,” said CEO Philippe Mellier.

De Beers bumped up the provisional sales number it released in January, when it said it had sold $540m worth of diamonds.

In second half of 2015, De Beers rough sales slumped 53 percent year on year to $1.4 billion as the miner increased flexibility for buyers during at the November and December sights to deal with the low demand. The company has already sold $1.16 billion worth in 2016. 

“Three short months ago we were in a very different position and a little while later we’ve seen things turn around pretty quickly.

The actions we took at the end of last year have had an impact, but we remain watchful. We shouldn’t assume everything is rosy again and we’ll keep that cautiously optimistic approach,” said David Johnson, head of midstream communications for De Beers. “

“We don’t want to try and run before we can walk,” Johnson commented. 

Johnson also pointed out that De Beers is careful to prevent a recurrence of last year’s “industry indigestion” as more rough enters the market than can be absorbed.

Anglo has put De Beers at the center of its turnaround program. The London-based parent, which last month reported a fourth year of losses, is speeding up plans to pull out of coal and iron ore and build its slimmed down future around diamonds, copper and platinum.

De Beers' contribution to Anglo's profit almost halved in 2015 as underlying earnings fell. Sales dropped by 34 percent as prices declined and De Beers cut supply.
De Beers and Russia's Alrosa PJSC, which control almost two-thirds of the market, sold more than $1 billion of diamonds in January, exceeding market expectations and sparking concerns that the sales may have been too much, too soon.

Mining companies cut about a quarter of global supply last year to arrest the 18 percent slump in rough-diamond prices brought on by China's economic slowdown and an industry wide credit crunch.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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