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De Beers monitors Covid-19 situation as diamond markets slowly recover

Global diamond markets are slowly picking up to pre COVID-19 levels — amidst prevailing challenges of movement restrictions, rough diamonds producers have adjusted their sales approach to find ways of pushing the product.

De Beers Group, the world’s largest producer by value and Botswana’s partner in the business, is continuing with its flexible offers and extended sales durations to ensure the goods are taken up by the midstream.

On Wednesday the diamond mining behemoth announced the value of rough diamond sales (Global Sight holder Sales and Auctions) for the second sales cycle of 2021.

Figures depict a continued recovery and increased sentiment as the middle players of the value chain continue to stock their inventories in response to increasing demand in the downstream.

During the cycle, which ran from late February to early March, De Beers gathered a total of $550 million in rough diamond sales, a 17% decrease when compared to the $663 million raked in during the previous cycle, the first sight of year 2021.

However, this decrease does not worry De Beers much, as cycle one sales were higher because the industry was opening up and pushing goods from stock piles that accumulated in 2020 owing to massive decline in demand occasioned by COVID-19.

The $550 million figure was significantly higher than the $362 million registered in cycle 2 of 2020, mirroring signs of a better year for 2021.

Globally, COVID -19 vaccine roll outs are sparking some rays of hope that the world economy could soon return to its glory days.

Because international travel is still very minimal, the diamond industry stands to enjoy a larger share of consumers’ leisure budgets as people stay home more, enjoy domestic travel and only express love and quality time with sparking gift exchange in-house.

De Beers highlighted this in one of their diamond insight reports last year, that reduced travel could boost diamond jewellery sales as travel-the sector’s all time competitor is still on a very slow recovery.

The company which sources majority of its diamonds in Botswana said on Wednesday that  owing to the restrictions on the movement of people and products in various jurisdictions around the globe, it continued to implement a more flexible approach to rough diamond sales during the second sales cycle of 2021, with the Sight event extended beyond its normal week-long duration.

“As a result, the provisional rough diamond sales figure quoted for Cycle 2 represents the expected sales value for the period 22 February to 08 March and remains subject to adjustment based on final completed sales” the London headquartered miner noted in a statement on Wednesday.

Bruce Cleaver, Chief Executive Officer of De Beers Group, said the Anglo American diamond unit saw the continuation of good rough diamond demand during its second sales cycle of 2021 on the back of positive consumer demand for diamond jewellery.

Cleaver explained that midstream buyers continued to express healthy demand following better than expected retail sales of diamond jewellery over Christmas, Chinese New Year and Valentine’s Day, with the industry now set to enter what is traditionally a period of lower seasonal demand.

The mining giant boss however said there is still a bit of uncertainty that requires cautious approach during the year as the company continues to observe recovery trends.

“While the year has started positively, we recognise ongoing near-term uncertainty in the pace and shape of the recovery,” said Cleaver.


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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