De Beers Braced for Another Cut in Production
July 19, 24![](/image_bank/NewsRoom_FullArticle/people/duncan%20wanblad.jpg)
(IDEX Online) - De Beers is expected to announce a further reduction in its 2024 production forecast, as market conditions worsen, especially in China.
Duncan Wanblad (pictured) CEO of parent company Anglo American, said he and his team were "actively assessing options with our partners to further reduce production to manage our working capital and preserve cash".
De Beers has already cut its production guidance once this year, announcing a 10 per cent reduction in April, from its original forecast of 29m - 32m carats to 26m - 29m carats.
In 2022 the UK-based miner produced 34.6m carats, slightly above its high estimate of 34m carats. Production in 2023 was 31.9m carats, an 8 per cent decrease.
Anglo did not provide a new guidance figure in its Q2 2024 Production Report, published yesterday (18 July), but even its current low estimate of 26m carats would represent a year-on-year decrease of 18.5 per cent.
"De Beers' diamond production reflects the lower revised guidance announced in our first quarter production report," Wanblad said.
"Trading conditions became more challenging in the second quarter as Chinese consumer demand remained subdued."
"With higher than normal levels of inventory remaining in the midstream and an expectation for a protracted recovery, we are therefore actively assessing options with our partners to further reduce production to manage our working capital and preserve cash."
It's worth noting that De Beers' production decreased by 23 per cent in Q1 2024 to 6.9m carats compared to the same period last year, indicating that the company is already implementing its reduced production strategy.
De Beers saw sales slump last year - down 36 per cent to $3.63bn, per carat prices down 25 per cent to $147 - and it made a loss in the second half of 2023.
Output at its mines in Botswana, Namibia, South Africa and Canada fell by 8 per cent to 31.9m carats.
It sold just 24.7m carats during the year (down 19 per cent). De Beers CEO Al Cook said in February that the company had built up diamond inventories of around $2bn.