Despite uncertainties in the global economy and volatile markets, the demand for rough diamonds remains strong as reflected by De Beers Group performance in the 2022 year.
This was said by De Beers Group Executive Vice President Paul Rowley during the company’s presentation of financial results in Gaborone on Thursday.
According to the results, total revenue for the company increased to $6.6 billion from $5.6 billion which was raised in 2021.
However, from the hefty amount, rough diamond sales rose to $6 billion from $4.9 billion therefore indicating a strong demand for the rough stones with the midstream replenishing stocks following a stronger consumer demand.
Production wise, rough diamond sales volumes totaled 30.4 million carats with an average realised price rise of 35 percent to $197 per carat from from $147 per carat.
The price rise was driven by the growth in the rough price index and sales of larger proportion of higher value rough diamonds.
As a result the average rough price index increased by 23 percent therefore indicating an overall positive consumer demand for diamond jewellery.
According to Rowley, De Beers’ focus on enhanced provenance assurance for its rough diamond helped underpin a solid demand.
“The first half of 2022 was dominated by positive trading conditions with retailers restocking following strong consumer demand for diamond jewellery sales over the 2021 holiday season. Though the Russia-Ukraine war and its associated sanctions on Russian diamonds brought uncertainty in the sector ,healthy consumer demand led to polished price growth and robust demand for rough diamonds.
We consider that increased focus on diamond provenance by number of US based jewellery businesses and global brand has the potential to underpin continued demand for De beers rough diamonds in the medium and longer term. Further, consumer desire for natural diamonds remains robust in key consumer markets ,”said Rowley.
Meanwhile ,Botswana collected $2.8 billion from its diamond business operations with De beers through the joint venture partnership (Debswana) and 15 percent shareholding in De beers. From the amount, $2.6 billion accounts for the Debswana sales while the $0.2 billion is for the stake which Botswana owns in De beers. The cumulative figure includes tax and royalties earnings.
“De beers broaden economic contribution to Botswana therefore driving shareholder value and direct benefit to the country, “said Rowley .Further De beers said it has prioritized local rough diamond sales for beneficiation drive. As a result, nine new factories were set up bringing the total to 31 and creation of 1700 additional jobs.
As a result, growth has been immense at local level which have seen local rough sales growing from $760 million to $1.064 billion in 2022 through the 31 sightholders. In addition, employment growth keeps on growing ,currently seating at 3800 with 77 percent of those being locals.
“Focus is on sustainability of the industry as rough sales are growing despite tough challenges. Utilization of the diamonds has gone up and production and manufacturing locally is gaining traction and that has led to skills transfer, employment creation and payment of more taxes,” said De beers Chief Financial Officer Susanne Swanniker-Tettey.
In 2013 when sales functions were relocated to Botswana, local staff base was standing at 148 but that has since increased to 253 in 2022,depicting a growth from 45% to 92%.Ten percent of Batswana are reported to be on international assignments with positions at strategic markets such as London, Dubai, Singapore, Antwerp and United States of America.
Botswana and De beers Group co-own Debswana on 50/50 shareholding and Diamond Trading Company Botswana (DTCB), a rough diamond sorting and valuing operation. As per the current agrreement,75 percent of Debswana production is sold through De beers Global Sightholders Sales while 25 % is sold through Okavango Diamond Company – a 100% state owned rough diamond marketing entity.
Botswana directly owns 15 % stake in the entire De beers Group, with the remaining 85% held by conglomerate Anglo American.
