As the diamond market continues to struggle with weaker demand, De Beers has cut its 2025 production target by 40%, reducing output to between 20 million and 23 million carats.
The move shows little optimism for a significant recovery in the diamond market this year, due to the continuing difficult conditions which were experienced last year.
De Beers- 85% owned by Anglo American, will also book impairment in its 2024 numbers after assessing the impact of diamond market conditions and general fall in demand in China.
De Beers is reported to be carrying a rough diamond stockpile worth $2 billion.
Significantly, the company has cut its 2025 production outlook to between 20 million and 23 million carats, compared with an earlier forecast of 30 million to 33 million carats.
In 2026, it expects to produce 26 million to 29 million carats, down from a previous plan of 32 million to 35 million carats. It anticipates production of 28 million to 31 million carats in 2027.
Commenting on the stockpile, Anglo said it was reduced “slightly” last year, but there was no getting away from economic reality.
“At De Beers, difficult rough diamond trading conditions mean that we have reduced production guidance in 2025 and 2026 to reflect our focus on value, working capital efficiency and cash generation. De Beers continues to monitor rough diamond trading conditions and will respond accordingly,” said Duncan Wanblad, CEO of Anglo.
In the year under review, diamond production decreased 26 percent to 5.8 million carats.
Anglo said this reflected the proactive production response to the prolonged period of lower demand, higher than normal levels of inventory in the midstream and a continued focus on working capital.
The diamond industry was pummeled by a 20 percent fall in the average rough price index.
Consequently, De Beers reduced its own sales volumes about 28 percent and sold a larger proportion of higher value rough diamonds, increasing its average realised price for the year by 3 percent to $152 per carat.
While Anglo has announced plans to divest its stake in De Beers, Wanblad prefers for a trade sale.
“I favour a trade sale based on sentiment. Trader buyers have more of a feel [for the market] than the public. But as markets recover, the public might get a lot more confident. There’s an equal option for both. I definitely would not discount an Initial public offering,” he said of possibly spinning De Beers out as a listed company,” he said.
De Beers’ rough diamond sales totaled 4.6 million carats in the fourth quarter (including two sights that were rolled into a single sales event), generating revenue of $543m.
This compared to revenue of $230m in the fourth quarter of 2023 which also consisted of two sights in which 2.8 million carats were sold.
