The global market for rough goods appears to be solid, according to the latest financial results posted by De Beers and Russia's Alrosa which jointly produce around 60 percent of global supply.
De Beers reported a five percent rise in rough diamond production for the fourth quarter of 2017 to 8.1 million carats, reflecting stronger trading conditions as well as the contribution from the ramp-up of the Gahcho Kué mine in Canada, the miner said.
Of the four countries where it mines diamonds – Botswana, Namibia, South Africa and Canada – there were increases in production in all but South Africa. In Canada, production doubled to 993,000 carats due to the ramp-up of the Gahcho Kué mine which came on line last year.
Total sales volumes which are comparable to production, were 8.2 million carats in Q4 2017 from 8.0 million carats in the year-earlier quarter. Total sales volumes for 2017, which are comparable to production, were 35.1 million carats compared with 32.0 million carats in 2016.
Although the full year consolidated average realized price of $162 per carat was 13 percent lower than in 2016, this was due to strong demand in Sight 1 2017 for lower value goods held in stock at the end 2016, following a recovery from the initial impact of India’s demonetization program in late 2016, as well as the ramp-up of production from lower value per carat but high margin operations, including Orapa and Gahcho Kué.
Meanwhile, production by Alrosa also appears to indicate that the miner is seeing strong demand for its rough as it reported output last year up by 6 percent year-on-year to 39.6 million carats, with rough sales totaling $4.2 billion.
The miner expects to sell 40 million carats of rough this year.
It does not appear to have had any problem in marketing its goods, after announcing that it has signed long-term agreements with 56 companies for the sale of gem-quality rough diamonds for the new 2018-2020 contract period.
Just eight of the companies are Russian. Of the others, five are from Israel, 22 companies are registered in Belgium, 14 companies from India, six from China and one company from the UK.
Alrosa said it is also considering another 11 companies as potential candidates for signing long-term agreements for the new sales period.
