Covid-19 restricts DeBeers production!
DeBeers Production report for the 1Q of 2020 & say, rough diamond production was in line with prior year at 7.8 million carats, with limited impact from COVID-19 measures introduced at the end of the quarter in producer countries.
Botswana production decreased by 5% to 5.6 million carats, driven by a 7% decrease at Orapa due to challenges related to commissioning of new plant infrastructure and maintenance, while production at Jwaneng reduced by 4% due to planned lower grade.
Namibian production increased by 6% to 0.5 million carats due to planned higher grade at the marine operations. In South Africa, production increased by 97% to 0.8 million carats as the final ore from the open pit is mined prior to transition to underground.
Production in Canada decreased by 19% to 0.8 million carats, primarily due to the closure of Victor, which reached the end of its life in Q2 2019. Gahcho Kué production increased by 4% to 0.8 million carats due to strong plant performance.
Rough diamond sales totalled 8.9 million carats (8.3 million carats on a consolidated basis) from two sales cycles, an increase compared to Q1 2019 (7.5 million carats from two sales cycles; 7.2 million carats on a consolidated basis), driven primarily by the fact that the early part of 2019 saw lower demand due to higher polished stocks.
Sales volumes increased year-on-year despite adverse demand impacts in Q1 2020 from COVID-19, with customers given the option to defer some allocations in the second sales cycle, offset by a shift in demand towards lower value goods. The third sales cycle of 2020 was not held due to COVID-19-related restrictions on the movement of people and product, and customers were provided with flexibility to defer all their allocations from Sight 3 until later in the year.
Full Year Guidance:
In response to the impact of COVID-19 on mining operations, wholesale trading activity and consumer traffic in key consumer markets, production guidance has been revised to 25-27 million carats (previously 32-34 million carats), subject to continuous review based on the disruptions related to COVID-19 as well as the timing and scale of the recovery in trading conditions.
