The group’s half year results posted this week showed that the group has managed to drop its group Capex costs from $302 million in the first half of 2023 to $264 million this year. De Beers communicated its new Origins strategy at the end of May, with a focus on four key pillars underpinned by a plan to streamline the business sustainably by reducing overhead costs by $100 million per year. “These comprised of focusing upstream investments on the major projects that will deliver the highest return integrating the midstream to deliver greater efficiency resetting the downstream by reinvigorating category marketing and evolving proprietary brands through scaling up De Beers Jewellers and refocusing Forevermark solely on the fast-growing Indian market,” executives revealed early this year. The mining company has not had a smooth start this year, as diamond downturn continues affected by weak demand in international markets, and oversupply in the midstream.
Announcing the groups half year results in Gaborone last week, De Beers Vice president, Paul Rowley, revealed that the group had pulled the lever on production in most of its mines to avoid oversupply in the market. “Rough diamonds production reduced to 13.3 million carats. This reflects the decision to intentionally lower production and change short-term plant feed mix in response to the weaker rough diamonds demand due to the higher than average levels of inventory in the midstream and cautious retailer restocking,” he revealed. Rowley further revealed that in Botswana, production was reduced by 24% to 9.7 million carats, driven by intentional lower production and short-term changes in plant feed at Jwaneng and Orapa.
“Rough diamonds trading conditions continue to be challenging. Although demand in the US has been steady and India remains robust, consumers in China are buying substantially fewer luxury products. Retailers are very cautious as they restock, creating higher than normal levels of midstream inventory,” Rowley added.
