De Beers’ sales fell 8% by volume last year amid a slowdown in the rough-diamond market and weak demand from the manufacturing sector.
The miner sold 30.9 million carats of rough, compared with 33.7 million carats in 2018, as clients bought fewer stones due to an oversupply in the midstream and global economic uncertainty, it reported last week.
De Beers’ average sales price dropped 20% to $137 per carat for the year, reflecting a higher proportion of lower-value goods. As a result, rough-sales value declined 25% to $4.04 billion for 2019, according to Rapaport calculations based on De Beers’ sight reports. The company’s average price index, which tracks its rough prices on a like-for-like basis, declined 6%.
The miner reduced production 13% to 30.8 million carats in response to market conditions, it explained.
In the fourth quarter, sales dropped 29% to 7 million carats from two sights. That compared with 9.9 million carats in 2018, when the company held three sights. Production for the three months fell 15% to 7.8 million carats.
De Beers plans to produce between 32 million and 34 million carats in 2020, representing an increase versus 2019 as the miner anticipates an improvement in trading conditions. It also expects higher output from its Venetia mine in South Africa, which the company is in the process of transitioning to underground.
Image: Rough diamonds being sorted with tweezers. (Ben Perry/Armoury Films/De Beers)