The world’s leading diamond production company, De Beers, produced fewer diamonds in Southern African countries in Q2 2022, said Oxford Economics 

In a briefing released on Tuesday, the prestigious economic research institution said that the global production of rough diamonds by the London-headquartered multinational dropped by 3.7% y-o-y to 7.9 million carats in Q2 2022.

In Botswana, Africa’s leading producer of the precious stone, production dropped by 4% y-o-y reaching 5.5 million ca between April and June. This decline was blamed on the processing of lower-grade ore at the countries’ two key mines of Jwaneng and Orapa mines, said the report.

As to South Africa, production also decreased by 6 percent y-o-y to 1.2 million carats due to the recovery of lower tons of diamonds, added the report.

Namibia is the only southern African country where De Beers operations achieved a higher level of production than the previous year production in Namibia swelled by 67.2% y-o-y to 0.6 million carats, largely driven by the continued strong performance from the new Benguela Gem diamond mining vessel since its early delivery in the first quarter of 2022,” the report noted.

The report also mentioned Angola, another diamond producing southern African countries where De Beers currently has no mining operations. Oxford Economics cited the latest figures from the Angolan Ministry of Finance which showed that diamond production had increased in Q2 2022 by 16.6 percent y-o-y reaching 2.4 million carats.

As to rough diamond sales, the report stressed that the demand has been robust so far this year outstripping supply. De Beers sales went up to $650 million in the fifth sight (concluded in June) of 2022, compared with $468m in the same sight of 2021, the report said.

“The year-to-date performance shows even more promise, as sales in 2022 are 24.4% higher than the same period in 2021,” noted the report, which expected De Beers to claim a larger market share given the sanctions imposed on the Russian diamond producer Alrosa.

However, Oxford Economics offers a bleak outlook for diamond prices despite remarkable spikes since last fall. 

“There are tentative signs that the tide is turning for diamond prices due to deteriorating demand, which is also a downside risk for production. Polished diamond prices declined slightly in June amid a weaker global economic outlook and a rise in inventory levels,” noted the report.

(Reporting by Noha El Hennawy; editing by Seban Scaria)
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