Image credit: De Beers
Anglo American, which has an 85% stake in De Beers said the diamond giant's total revenue decreased by 27% to $3.4 billion in 2020 from the previous year's $4.6 billion with rough diamond sales falling by 30% to $2.8 billion compared to $4 billion in 2019.
Anglo said the COVID-19 pandemic significantly impacted De Beers' brand sales in 2020, with large-scale store closures in Asia in the first quarter, followed by western markets in the second quarter and beyond.
"However, both De Beers Jewellers and Forevermark™ saw a strong recovery in sales as restrictions eased and stores reopened," it said.
Anglo said De Beers' rough diamond production dropped by 18% to 25.1 million carats compared to 30.8 million carats, a year earlier in response to lower demand due to the pandemic and the COVID–19 related shutdowns in southern Africa during the first half of the year.
Despite the reduction in production volumes, unit costs decreased by 10% to $57 per carat from $63 per carat in 2019 owing to cost-saving measures and favourable exchange rates that have resulted in a higher mining margin of 54%.
Meanwhile, De Beers' production guidance for 2021 is 32–34 million carats, subject to trading conditions, the extent of further COVID-19-related disruptions and ongoing operational challenges.
"The higher production is driven by an expected increase in ore and improved grade performance at both Jwaneng and Venetia," said Anglo.
"Unit cost guidance is [about] $55/ct, reflecting the increase in production volumes and the benefits of the restructuring undertaken in 2020."
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
