De Beers expects a rebound in diamond market as economies reopen

Anglo American-owned diamond miner De Beers is confident of a rebound in diamond demand as markets across the world begin to reopen after lockdown period triggered by the Covid-19 pandemic.

“The diamond industry is a highly resilient industry, it’s gone through various challenges…world wars, economic depressions,” Mpumi Zikalala, Managing Director for De Beers South Africa and Canada, said in an interview with Fin24 Speaks on Thursday.

However, she said, the varying degrees of lockdown in the different consumer markets made it difficult to predict when the full recovery would occur.

China has gradually opened up the economy following a wave of coronarivus-related deaths that began towards the end of last year. While the US market was in the process of opening up, the current public protests over racism in the world’s largest diamond market have seen some retailers close shop, Zikalala said.

In April, a guidance by Anglo American stated that De Beers had revised down its production forecast for 2020 by seven-million carats to 25-27 million carats due to expected impact of Covid-19 on business.

“It’s very difficult to say what would happen simply because clearly this pandemic is unprecedented, one thing that has stood the test of time is the consumers desire for diamonds,” she said.

Zikalala said De Beers’ Venetia open pit mine in the Limpopo province was ramping-up operations, while applying healthy and safety guidelines for Covid-19.  She said measures such as temperature scanning and sanitising methods had become a “new normal”, as the industry battles adopts news way to prevent infections.

The mining industry has seen a growing number of coronavirus infections among employees since companies began ramping-up production. The industry has so far recorded 527 confirmed cases of infection, according to the Minerals Council.

Zikalala said the mine was close to full capacity, with workers, who are considered to be vulnerable to the disease, not yet returning to work.

De Beers is in the process of developing the Venetia underground mine, in an approximately R20 billion development that is forecast to shift into production from 2021.

In early March, De Beers, reported a 28{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} year-on-year decline in sales at $355m, down from $496m in 2019.