Debswana Production Down 12% In Second Quarter

Debswana production declined in the second quarter of the year as a reflection of De Beers’ decision to reduce production in response to prevailing trading conditions in the second half of 2015.

A dump truck at a Debswana operation

A dump truck at a Debswana operation

De Beers said its diamond production decreased by 19% to 6.4 million carats. At Debswana, the diamond mining company owned 50/50 by the diamond major and Botswana government, production decreased by 12% to 5.2 million carats with Orapa reduced by 27% and the placing of Damtshaa on care and maintenance from 1 January 2016.

The company said production at DBCM (South Africa) decreased by 26% to 0.8 million carats due mainly to the completion of the sale of Kimberley Mines in January 2016.

Production at Namdeb Holdings (Namibia) decreased by 31% to 0.3 million carats with reduced production at Debmarine Namibia because of extended planned in-port maintenance of the Mafuta vessel and lower grades at Namdeb’s Land operations.

Production in Canada decreased by 71% to 0.1 million carats due to Snap Lake being placed on care and maintenance in December 2015.  Production at Victor was in line with Q2 2015.

Consolidated rough diamond sales in Q2 2016 were 9.6 million carats (from three Sights) compared with 4.9 million carats (from two Sights) in Q2 2015. Apart from the additional Sight in 2016, this increase reflected higher midstream restocking from lower inventory levels in 2015. Consolidated sales volumes for H1 2016 were 17.2 million carats, compared with 13.3 million carats for H1 2015 (from five Sights, in each case).

The De Beers rough price index was on average 16% lower in H1 2016 compared with H1 2015. The average realised price at $177/ct was 14% lower than H1 2015.

“The decisive actions taken by De Beers last year led to more normal trading conditions in the first half of 2016 with sales volumes increasing as a result, but we maintain a cautious outlook,” Mark Cutifani, Anglo American Chief Executive said. Anglo owns 85% of De Beers.

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