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Diamond mining giant De Beers has announced a reduction in its production forecast for the year, citing persistent weakness in global diamond demand, particularly in China.
In its latest operational update, the company revealed that it would be adjusting its production plans to align with the subdued market conditions. While the miner has maintained its full-year production guidance of between 23 million and 26 million carats, it is actively exploring options with its partners to further curtail output.
The decision comes in response to elevated inventory levels in the midstream diamond market and a prolonged period of sluggish consumer demand, particularly in China, a key market for luxury goods. To mitigate the impact of these challenges, De Beers has taken several steps, including merging sales cycles and accelerating the timing of future sales events.
Despite these measures, the company reported a significant decline in third-quarter sales, both in terms of volume and value. Rough diamond sales for the quarter totalled 2.1 million carats, generating $ 213 million in revenue, compared to 7.4 million carats and $ 899 million in the same period last year.
While De Beers has seen an increase in the average realized price of its rough diamonds, this has been offset by a decline in the average rough price index. The company’s jewellery division, De Beers Jewellers, has also experienced challenges, with slower demand for bridal and solitaire jewellery.
To address the growing issue of lab-grown diamonds, De Beers has introduced DiamondProof, a new device designed to distinguish between natural and lab-grown diamonds at the point of sale. This initiative aims to reassure consumers about the authenticity of natural diamonds and protect the integrity of the natural diamond supply chain.
As De Beers navigates these turbulent market conditions, it remains committed to adapting its operations to ensure long-term sustainability. The company’s focus on high-quality diamonds, innovative marketing strategies, and technological advancements will be crucial in driving future growth and maintaining its position as a leading player in the global diamond industry.
