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De Beers Group's profits more than doubled in 2016. Image courtesy: <a href="http://bit.ly/2munEb6" target="_blank">De Beers Group</a>
De Beers Group's profits more than doubled in 2016. Image courtesy: De Beers Group

De Beers profits double in 2016

New figures show that De Beers Group’s profits more than doubled in 2016, which was a result attributed to strong rough diamond demand, cost-cutting measures and favourable exchange rates.

A report released by De Beers’ parent company Anglo American stated that ‘underlying earnings’ – or profits – rose from US$258 million (AU$336 m) to US$667 million (AU$869 m) in the year ended 31 December 2016.

Revenue increased 30 per cent to US$6.1 billion (AU$7.9 b), driven by a 37 per cent increase in rough diamond sales to US$5.6 billion (AU$7.3 b).

According to the statement, rough diamond production decreased 5 per cent to 27.3 million carats. This was reflected by a company decision made in 2015 to scale back mining operations following weak trading conditions.

De Beers CEO Bruce Cleaver said 2016 was generally a ‘much better’ year for the diamond industry.

“The midstream performed much better than 2015, and I think largely as a result of the strong and decisive action that we took in 2015 to reduce production in accordance with demand,” Cleaver explained.

In addition, the report noted that De Beers’ diamond brand Forevermark was now available in 25 markets across 2,010 retail outlets, which represented a 14 per cent increase compared with the previous year.

It was also outlined that rough diamond demand was expected to normalise in 2017, with production predicted to be in the range of 31 to 33 million carats.

In other De Beers news, production at the company’s mine in Canada – believed to be the world’s largest diamond mine to open in the past 13 years – has officially begun.

Gahcho Kué, situated in the Northwest Territories of Canada, is expected to produce approximately 54 million carats of rough diamonds over its lifetime.

The operation is a joint venture between De Beers and Canadian diamond mining company Mountain Province Diamonds.

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.

Production at Gahcho Kué, De Beers
Production at Gahcho Kué, De Beers' Canadian mine, has officially begun

More reading
De Beers production and sales decline
De Beers opens world largest diamond mine
Change at the top for De Beers
 











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Sunday, 21 July, 2019 04:20pm
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