De Beers, a unit of Anglo American, is sticking to its 2023 production target because it is confident in the long-term outlook, its chief executive said on Monday, despite a glut in diamond supply amid weakening demand.
Global demand for diamonds has fallen to levels not seen since the pandemic and De Beers saw demand at its latest sale in October fall 82% from a year earlier to $80 million, as global economic challenges continue to hit appetite for luxury goods.
In recent months, major industry players have taken steps to ease the supply glut, with India – which cuts and polishes 90% of the world’s rough diamonds – imposing a two-month import ban, while top producer Botswana Okavango Diamond Company (ODC) cancelled its November and December auctions.
Elsewhere, the Group of Seven (G7) nations are expected to announce an import ban on Russian diamonds in a bid to squeeze Moscow’s ability to finance the war in Ukraine.
Russia is the world’s largest producer of rough diamonds by volume.
For its part, De Beers has restricted supply and offered flexibility to its contracted customers, but CEO Al Cook said he was confident in the industry’s fundamentals as global supply has already peaked while demand for natural diamonds continues to grow.
“Because of our confidence in the long-term future of diamonds, we are continuing to produce in the same manner as outlined in our guidance and we are building inventory,” Cook told a media briefing.
Anglo American said in October that De Beers would maintain its 2023 production guidance of 30-33 million carats set at the beginning of the year.
In the first nine months of this year, De Beers’ production fell 10% to 26.24 million carats, mainly due to a planned reduction in output at its Venetia mine in South Africa, which is being converted to an underground operation.
