De Beers sells $315m worth of diamonds in latest sale
The northern summer is generally a quieter period for rough diamond sales, says CEO Al Cook
De Beers sold rough diamonds valued at $315m at its fifth sales cycle of the year, Anglo American said on Wednesday.
This was lower than the $383m worth of diamonds at the fourth sales cycle and the $456m sold at Cycle 5 sales in 2023.
“The northern summer is generally a quieter period for rough diamond sales, and this was reflected in our cycle 5 sales,” De Beers CEO Al Cook said.
“The recent annual JCK jewellery show in Las Vegas confirmed a resurgence in retailers’ interest in natural diamonds in the US but ongoing economic growth challenges in China mean we continue to expect a protracted U-shaped recovery in demand,” Cook said.
Business Day reported earlier in June that De Beers and the diamond industry are only just emerging from a horror year in which demand for diamonds tanked in an environment where huge inventories had built up as consumers held back on luxury spending in tough times.
Late in 2023, De Beers took the unprecedented step of allowing its large buyers — the so-called sightholders — not to take up their allocations at all, as they are usually required to do at each sight.
The plunge in diamond prices was one of the reasons for Anglo’s profit decline for financial 2023, as well as one of the factors driving the Anglo share price to levels that made it a prime candidate for a takeover bid.
BHP said in its recent proposal for Anglo that it would put De Beers under strategic review. But Anglo went all the way in its far-reaching mid-May restructuring plan, promising to sell or unbundle De Beers to simplify its portfolio and unlock value.
Anglo has promised that the restructuring will be substantially complete by end-2025. But the De Beers piece of the plan could take the longest.
Analysts have pointed to the risks of selling, unbundling, or even simply listing the diamond group at such a bad time in the diamond cycle. There are big question marks too over whether this is a cyclical downturn, or a more structural one, as hi-tech synthetic diamonds gain ever more favour in the jewellery market.
De Beers, which is 85% held by Anglo and the rest by the Botswana government, has promised to revamp its strategy.
MackenzieJ@arena.africa