De Beers latest diamonds sale the lowest this year
Diamond giant De Beers, the world’s top producer by value, saw its sales of rough gems fall in its latest offering as the sector heads into a seasonally slower period, but the company said results still beat expectations.
The company, majority owned by Anglo American (LON:AAL), sold $485 million of rough diamonds in September, the eighth out of its ten annual sales events, down from the $639 million collected at its previous offering.
It sold $485 million of rough diamonds in September, down from the $639 million it collected at its previous offering.
Chief executive Bruce Cleaver, however, said that demand for the company’s rough diamonds continued to reflect the improved midstream trading environment compared with the state of the industry last year.
Rough-diamond prices have rebounded almost 5% so far this year after De Beers and rival Alrosa reduced output in an effort to improve market conditions. Miners of the precious stone have been struggling due to weak demand and falling prices after global demand for diamond jewellery hit a high of $81 billion in 2014 and production soared, causing a supply-glut by 2015.
De Beers, which currently has about 30% of the rough diamond market, recently opened its Gahcho Kué mine in Canada's Northwest Territories, which is expected to contribute $5.2 billion (Cdn$6.7 billion) to Canada’s economy and provide 1,200 new jobs.
That mine and the imminent start of mining at other two new diamond operations, including Stornoway’s (TSX:SWY) Renard project in Quebec, are expected to add around 7 million carats annually to global production once fully operational, which is likely to affect prices, De Beers warned last month.