Debswana production up 8 % in 2022
Business

Production at Debswana, the partly state owned rough diamonds miner has risen by 8 percent in the year 2022 to 24.1 million carats from 22.3 million in the prior year 2021, Debswana’s parent company – De Beers Group reported last week.
In its production report for the fourth quarter of 2022 De Beers revealed that rough diamond production increased by 6% to 8.2 million carats, reflecting strong operational performance across the assets, partially offset by the planned completion of the final cut at Venetia open pit.
In Botswana, production increased by 11% to 5.8 million carats, primarily driven by strong plant performance, particularly at Jwaneng.
Debswana production took off with 6.1 million carats in the first quarter of 2022 before going down to 5.5 million carats in the second quarter of year. Production then picked up significantly to 6.6 million in the third quarter and then dropped to 5.7 million in the last quarter of the year.
For the last quarter of 2022 production at other De Beers operations went up significantly with Namibia leading the increase with a 51 % jump.
Production in the south western country where De Beers operates both inland and marine mining increased by 51% to 0.6 million carats, primarily driven by the continued strong performance from the Benguela Gem vessel and the treatment of higher grade ore at the land operations.
South Africa production decreased by 27% to 0.9 million carats in the fourth quarter of 2022, due to the planned completion of the final cut at Venetia open pit. The mining of the open pit was completed in December and the mine will transition to underground operations in 2023.
Production in Canada increased by 7% to 0.8 million carats in the last quarter of 2020, primarily driven by the treatment of higher grade ore.
In terms of sales midstream polished diamond inventories continued to build in the fourth quarter, as retailers restocked more cautiously amidst the growing economic uncertainty. This led to downward pressure on wholesale polished prices.
However, demand for De Beers’ rough diamonds remained steady, with rough diamond sales totalling 7.3 million carats (6.6 million carats on a consolidated basis) from two Sights, compared with 7.7 million carats (7.2 million carats on a consolidated basis) from three Sights in Q4 2021 and 9.1 million carats (8.5 million carats on a consolidated basis) from three Sights in Q3 2022.
The full year consolidated average realised price increased by 35% to $197/ct (2021: $146/ct), driven by a 23% increase in the rough diamond price index, as well as selling a larger proportion of higher value rough diamonds in the first half of the year.
The increase in the rough price index reflected overall positive consumer demand for diamond jewellery and was supported by De Beers’ proposition of provenance-assured diamonds.
Data released by Bank of Botswana late January 2023 indicates that Sales of diamonds from Debswana stood at $4.588 billion in 2022 compared to $3.466 billion in 2021.
In local currency, this indicates that rough diamond sales rose 48.3% to P56.544 billion, on the back of stronger dollar during the period.
Last week De Beers released results for the value of rough diamond sales (Global Sightholder Sales and Auctions) for the first cycle of the year 2023.
Figures posted by the London headquartered miner reflected a lower start for the year with a 31 percent drop in sales from $660 million recorded in the first cycle of the year 2022 to $450 million registered for the first sales cycle of 2023. This was however an increase from the $417 million recorded in the immediate last sales cycle, 2022 cycle 10.
Alongside the results announcement, De Beers noted 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 first sales cycle of 2023, with the Sight event extended beyond its normal week-long duration.
As a result, the provisional rough diamond sales figure quoted for Cycle 1 represents the expected sales value for the period 16 January and 31 January and remains subject to adjustment based on final completed sales.
Commenting on the results Bruce Cleaver, CEO, De Beers Group, said consumer demand for diamond jewellery over the 2022 end-of-year holiday season performed well.
He said as expected, given the macroeconomic outlook at the time, Sightholders took a cautious approach in late 2022 in planning their 2023 allocation schedule, with a greater weighting of goods to be purchased as the year progresses.
“While there is still some uncertainty over the macroeconomic environment, we see cautious optimism for demand to increase as China continues to reopen and inflation rates start to decrease in many major economies.”
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MMG Chairman, Jiqing Xu, echoed Ferreira’s sentiments, stating that the acquisition of Khoemacau aligns with MMG’s growth strategy and vision. Xu emphasized MMG’s commitment to creating opportunities for all stakeholders, including shareholders, employees, and communities. He expressed confidence in Khoemacau’s expansion potential and the company’s ability to realize its full potential with the support of MMG.
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