De Beers lowers production guidance amid challenging trading conditions
The group expects full year 2024 EBITDA for De Beers to be marginally negative
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De Beers Group has lowered its production guidance for 2025 to 20–23 million carats (previously 30-33 million carats), reflecting the challenging rough diamond trading conditions.
Although rough diamond sightholder sales for the quarter improved to 4.6-million carats for $543m (£437.1m) in revenue, compared with the 2.8-million carats sold for $230m (£185.1m) in the fourth quarter of 2023, consolidated sales volumes for the 2024 full-year were down 28% year-on-year.
The group also recorded a 26% decrease in rough diamond production to 5.8 million carats in the fourth quarter.
The company attributed the drop to prolonged periods of lower demand, higher than normal levels of inventory in the midstream and a continued focus on managing working capital.
Despite low sales volumes, the group stated that inventory has reduced slightly year-on-year through managing purchases and downstream stocks.
In Botswana, production decreased by 31% to 4.2 million carats, as a result of planned actions to lower production at Jwaneng.
Meanwhile, in Namibia production decreased by 14% to 0.5 million carats, reflecting intentional action to lower production at Debmarine Namibia, partially offset by planned higher grade mining and better recoveries at Namdeb.
Similarly, production in Canada also decreased 43% to 0.5 million carats as a result of planned actions to treat lower grade ore. While, in South Africa, production increased by 27% to 0.6 million carats, driven by the Venetia underground project and a slight improvement in ore grades.
According to De Beers, challenging trading conditions persisted through the quarter as “cautious retailer purchasing” and higher than normal levels of inventory in the midstream suppressed demand for rough diamonds.
The group expects full year 2024 EBITDA for De Beers to be marginally negative.
De Beers said: “The group is undertaking an impairment review of De Beers’ carrying value, assessing the impact of diamond market conditions and general fall in demand in China which is likely to lead to an impairment at the full year results. We continue to assess market conditions and are currently implementing actions to further manage cash flow, spending and inventory levels in 2025.”
