London, England — 29 July 2013 – With full recovery from the Jwaneng slope failure and Venetia mine flooding expected during the second half, De Beers continues to anticipate that full-year production will recover to be broadly in line with 2012 subject to market conditions.
Total diamond production over the first six months of 2013 amounted to14.3Mcts, compared to 13.4Mcts in the first half of 2012, owing to improved ore grades at Orapa and Jwaneng mines.
De Beers’ underlying operating profit contribution to Anglo American increased by US$322 million to US$571 million, driven primarily by Anglo American’s increased shareholding from August 2012. In addition, there was a favourable exchange variance and slightly higher realised prices, partially offset by acquisition depreciation of US$80 million.
The company has continued to improve its safety performance year on year, with a further reduction in the lost time injury frequency rate to 0.24 (30 June 2012: 0.45). It is benefiting from an increasingly integrated approach with Anglo American in the management of environment, community, occupational health and safety matters.
In South Africa, Venetia mine was impacted by the heavy flooding in the Limpopo province in January, but ore mining shortfalls were mitigated through the processing of ore stockpiles. Restoration of full operations is expected during the second half of 2013.
In Namibia, production has increased at both the Namdeb and Debmarine Namibia operations.
Sales remained steady during the first half, with total sales of US$3.3 billion (30 June 2012: US$3.3 billion) and rough diamond sales of US$3.0 billion (30 June 2012: US$3.0 billion). After a 12% decline in De Beers’ rough diamond prices during the second half of 2012, prices increased by 6% in the first six months of 2013. The realised average price to June 2013 was 2% higher than for the same period 2012, driven by an improved product mix, more than offsetting the lower price index.
In Botswana, infrastructure at the Jwaneng mine Cut-8 extension project is now complete. Within the current life of mine plan, Cut 8 will provide access to an estimated 86 Mt of ore to be treated yielding 102 Mcts of high quality diamonds, and extend the life of mine of the world’s richest diamond mine to at least 2028.
In South Africa, final outstanding regulatory clearances for the Venetia underground project were received in February 2013. The project team has been established and early earthworks have already commenced. The project will extend the life of Venetia Mine beyond 2040, and contains an estimated 96 Mcts in approximately 130 Mt to be treated.
De Beers expects moderate growth in diamond jewellery demand in the remaining six months of 2013, supported by improving sentiment in the US market and continued growth in China, albeit at a lower rate. Despite the fragility of the global economic recovery, macro-economic conditions are generally supportive of global growth in the polished diamond market in 2013 at levels slightly above 2012.
Source: De Beers Group. For more information, click here.