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De Beers recorded a 5 per cent increase in rough diamond production in 2014
De Beers recorded a 5 per cent increase in rough diamond production in 2014

De Beers production up; India moves to cut middlemen

De Beers Group has announced an increase in diamond production while the Indian Government has made moves to cut diamond middlemen.

De Beers’ rough diamond output in 2014 rose 5 per cent to 32.6 million carats. The figures were released as part of Anglo American’s production report for the fourth quarter ended 31 December. Anglo American holds an 85 per cent share in De Beers, with the remaining 15 per cent held by the government of the Republic of Botswana.

According to the report, the positive result was due to increased production by Debswana – a joint venture between De Beers and the government of Botswana – where improved processing performance at two of its mines led to higher output.

De Beers’ fourth quarter diamond production figure of 8.4 million carats represented a 2 per cent increase compared to the 8.2 million carats mined in the third quarter of 2014. However, a year-on-year comparison showed an 8 per cent decrease from the 9.1 million carats produced in the fourth quarter of 2013.

This was attributed to the production of lower grades at two of the company’s South African mines as well as a mandatory safety stoppage at the Snap Lake mine in Canada. 

The De Beers announcement came hot on the heels of production figures released by another major diamond company, Rio Tinto. According to its report, rough diamond product decreased 13 per cent year-on-year in 2014.

India moves to cut diamond middlemen
Pankaj Parekh, GJEPC vice chairman
Pankaj Parekh, GJEPC vice chairman
Mavjibhai Patel, Kiran Gems director
Mavjibhai Patel, Kiran Gems director
Narendra Modi, Prime Minister of India
Narendra Modi, Prime Minister of India

In other diamond news, the Indian Government has reportedly sent a delegation of officials from its finance and commerce ministries to two of the world’s largest diamond trade centres, Dubai and Antwerp.

It is believed the team is undertaking research on how these centres operate as the Indian Government prepares to implement a similar diamond trade regime in its own country with the aim of removing “middlemen” in the manufacturing and distribution channels.

As previously reported by Jeweller, the Indian Government announced in December last year that it would be implementing a Special Notified Zone (SNZ) in order to encourage direct trade between Indian diamond manufacturers and international mining companies such as those located in Russia.

“Major mining companies can import rough diamonds on a consignment basis and re-export unsold ones [from the zone],” Indian Prime Minister Narendra Modi explained at the time. “This is going to benefit [the] Indian diamond industry and create more jobs for our youth.”

A number of media sources indicated that the Indian diamond industry was eager for the SNZ to come into effect, although at the time of publication, a date had not yet been confirmed.

The Economic Times quoted Mavjibhai Patel – director of Indian diamond manufacturing company, Kiran Gems – as saying, “If the middlemen are cut down, the cost of production can come down by 5 per cent. That will have a significant impact on our margins. It will improve both exports and imports.”

The Indian business newspaper also spoke with Gem and Jewellery Export Promotion Council (GJEPC) vice chairman Pankaj Parekh, who said, “If the SNZ comes up, it will bring a shift in market dynamics from Belgium and Dubai to India.”

More reading
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De Beers increases accessibility to its rough diamond

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Monday, 19 August, 2019 01:00am
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