Financial results | Diamond mining
Last Thursday De Beers Group released its Financials for the year 2021, total revenue increased significantly to $5.6 billion(over P60 billion) from $3.4 billion ( around P36 billion) in 2020, with rough diamond sales rising to $4.9 billion (over P50 billion) from $2.8 billion( around P30 billion) in 2020 driven by positive sentiment and strong demand for diamond jewellery in key
consumer markets.
Midstream capacity recovered in 2021, despite the second wave of Covid-19 infections in India in the second quarter of the year.
On a consolidated basis, rough diamond sales volumes were significantly higher at
33.4 million carats from 21.4 million carats in 2020.
The average realised price rose by 10% to $146/ct (2020: $133/ct),primarily as a result of positive market sentiment which gave rise to an 11% strengthening of the average rough
price index.
Revenue also increased within De Beers’ other businesses, including Element Six.
Underlying EBITDA increased to $1,100 million (2020: $417 million), reflecting the improvement in sales driven by the recovery in demand.
Unit costs were broadly flat at $58/ct (2020: $57/ct), as the benefit of higher production
volumes was offset by an increase in input costs and unfavourable exchange rates.
Capital expenditure increased by 48% to $565 million (2020: $381 million), as spend returned to more normalised levels following the deferral of sustaining projects during 2020 in response to Covid-19.
The execution of Venetia Underground (in South Africa) and Jwaneng Cut-9 (in Botswana) life extension projects continued to progress, and the mine life extension of the Namibian land operations was approved during the year.
The new AMV3 vessel for Namibia, now named the Benguela Gem (the largest and most advanced diamond recovery vessel ever built),arrived in Cape Town in September 2021 to complete preparations for its commissioning in the first quarter of 2022. Total revenue and rough diamond sales for 2019 were $4.6 billion and $4.0 billion respectively.
Rough diamond production increased by 29% to 32.3 million carats from 25.1 million carats in 2020 primarily due to the lower levels of production in 2020 as a result of the impact of Covid-19 related lockdowns and lower demand due to the pandemic.
Despite the operational issues and heavy rains in southern Africa in the first quarter of 2021,production was increased to meet the stronger demand for rough diamonds.
In Botswana, production was 35% higher at 22.3 million carats (2020: 16.6 million carats) as production was increased in response to stronger prevailing demand.
Production at Jwaneng increased by 71% to 12.9 million carats (2020: 7.5 million carats) due to the planned treatment of higher grade ore, and as a result of Covid-19 related lockdowns in the previous year.
Production at Orapa increased marginally by 5% to 9.4 million carats (2020: 9.0 million carats), despite the impact of heavy rainfall at the beginning of the year and the planned closure of Plant 1 in late 2020.
In Namibia, production was broadly in line at 1.5 million carats (2020: 1.4 million carats), reflecting an increase from the remobilisation of most vessels in late 2020, partly offset by planned maintenance.
In South Africa, production increased by 41% to 5.3 million carats (2020: 3.8 million carats), owing to the impact of the Covid-19 lockdowns in the first half of 2020 and the planned processing of higher grade ore from the final cut of the Venetia open pit.
In Canada, production was marginally lower at 3.2 million carats (2020: 3.3 million carats), mainly due to a temporary Covid-19 related shutdown in the first quarter of 2021
