De Beers scraps diamond sales event

De Beers sells its gems through 10 sales a year in Botswana’s capital, Gaborone (Image courtesy of De Beers Group)

De Beers, the world’s largest diamond producer by value, has cancelled its third sales event as lockdowns to contain the spread of the novel coronavirus in Botswana, South Africa and India made it impossible for buyers to attend.

The Anglo American unit sells diamonds to a handpicked group of about 80 buyers 10 times a year at events called sights. The third one this year was scheduled to take place from March 30 to April 3.

In February, the diamond giant reported its worst set of earnings since Anglo American (LON:AAL) acquired it in 2012.

De Beers is enabling customers to defer 100% of their sight 3 allocations to later in the year, and said it would continue to seek innovative ways to meet its sightholders supply needs in the coming weeks.

Russia’s Alrosa, the world’s No.1 producer of rough diamonds by carats, said earlier this month that it was studying options for online trade as global travel restrictions make traditional physical inspection of gemstones almost impossible.

The pandemic has put new worries on the diamond industry, which was finally beginning to show signs of recovery, following a disastrous 2019.

In February, De Beers reported its worst set of earnings since Anglo American (LON:AAL) acquired it in 2012.

Precious gemstones miner Gemfields (LON: GEM) said on Monday that all but critical operations at its Kagem emerald mine in Zambia had been suspended for what is hoped to be a period not exceeding one month.

Operations in Mozambique, including the Montepuez Ruby Mine, may follow suit, but remain unaffected at this time, the company said.

It also noted that exploration projects in Madagascar had been suspended and that its offices in London and Jaipur were closed, with staff working remotely.

Global demand and prices for all types of diamonds has steadily fallen since 2018, affecting small stones producers the most, due to an oversupply in that segment that dragged prices down.

The glut of rough and polished stones destroyed margins for the industry’s crucial middlemen who cut, polish and trade them.

Increasing demand for synthetic diamonds also weighed on the market. Man-made stones require less investment than mined ones and can offer more attractive margins.