De Beers merges two auctions as diamond sales disappoint

De Beers, the largest diamond producer by value, saw rough diamond sales drop in the fourth sales cycle of 2023 due mainly to ongoing economic uncertainty and a slower pace of recovery in post-lockdown China.

The Anglo American unit sold US$480 million ($645.5 million) worth of rough diamonds in the period between May 1 and May 16, down 11% from US$542 million in the previous cycle and down 21% from the US$604 million it fetched in the same cycle last year.

De Beers sells its gems through 10 sales each year in Botswana’s capital, Gaborone, and the handpicked buyers — known as sightholders — generally must accept the price and the quantities offered.

Around 60 handpicked customers are given a black and yellow box each time. These contain plastic bags filled with stones, with the number of boxes and quality of diamonds depending on what the buyer and De Beers had agreed to in an annual allocation.

De Beers chief executive Al Cook said earlier this week the consumer slowdown in the U.S. and China has prompted the company to combine both cycle 5 and 6 interim and main auctions. 

“Whilst this was a difficult decision to make, we believe that it is one that reflects our sustainable and responsible approach to rough diamond supply,” Cook said.

De Beers is not the only diamond miner to be impacted by a trading slowdown amid economic caution across the world.

Last week, Canada’s Lucara Diamond (TSX: LUC) reported lower production and sales figures during the March quarter on global economic concerns and geopolitical uncertainty, including Russia’s ongoing invasion of Ukraine.