De Beers Q2 Output Jumps 88% Amid Persistent Diamond Market Weakness
Key Takeaways
- •De Beers’ second-quarter rough diamond production increased 88% year over year to 7.8 million carats.
- •First-half average realized prices fell 32% to $105 per carat, partly due to a larger share of lower-value stones in the sales mix.
- •Second-quarter rough diamond revenue declined 44% to $665 million, even as first-half sales volumes rose 20%.
- •Anglo American is negotiating the sale of its 85% stake in De Beers after choosing a preferred consortium led by former De Beers CEO Gareth Penny.
- •De Beers plans to suspend production at the Venetia mine for two years from the second half while keeping full-year output guidance at 21 million to 26 million carats.
De Beers, the diamond division of Anglo American (LON:AAL), nearly doubled rough diamond production in the second quarter as operations in Botswana, Canada, and South Africa processed higher-grade ore. However, weak demand and falling prices continued to weigh on the business as Anglo American advances plans to divest the unit.
Production rose 88% year over year to 7.8 million carats in Q2, bringing first-half output up 46% to 14.91 million carats. The gains partly reflected a comparison against an extended maintenance shutdown at Botswana's Orapa mine in Q2 2025, along with planned mining of higher-grade ore at Jwaneng in Botswana and the Gahcho Kué mine in Canada. The contrast between higher output and weaker revenue highlights how diamond miners can face pressure even when mine performance improves, particularly when sales mix and end-market demand move against them.
By country, Botswana's output more than doubled to 5.5 million carats in the quarter, with first-half production up 43% to 10.3 million carats. Canadian production reached 1 million carats as Gahcho Kué accessed a new higher-grade mining area. South Africa's Venetia mine increased output 24% to 700,000 carats through higher underground processing volumes.
Market Pressures Persist
Despite the production surge, De Beers' commercial outlook remained strained. Geopolitical and macroeconomic uncertainty, including the conflict in the Middle East, continued to erode consumer confidence. Lab-grown synthetic diamonds further pressured demand for lower-value natural stones.
The average realized price fell 32% year over year to $105 per carat in the first half, reflecting a higher proportion of lower-value stones in the sales mix as De Beers drew down inventories carrying a book value of $2 billion. The average rough diamond price declined 16%. Stronger pricing for higher-value goods helped keep the overall average price index stable.
Second-quarter rough diamond sales fell 7% year over year to 7.1 million carats, with revenue dropping 44% to $665 million. For the first half, sales volumes increased 20% to 14.78 million carats, but revenue declined 23% to $1.31 billion.
Divestiture Negotiations Continue
The results underscore the challenges facing De Beers as Anglo American reshapes its portfolio ahead of its merger with Teck (TSX: TECK.A, TECK.B; NYSE: TECK) through the planned separation of the diamond business. De Beers' performance is therefore being assessed not only as a mining result but also as part of a broader corporate simplification effort at Anglo American.
Anglo American said negotiations to sell its 85% stake in De Beers are ongoing after selecting a preferred consortium led by former De Beers chief executive Gareth Penny. Botswana, which holds the remaining 15% stake, is weighing whether to exercise its right of first refusal and potentially negotiate to increase its ownership.
De Beers plans to halt production at the Venetia mine for two years beginning in the second half to reduce costs and defer spending, while maintaining full-year production guidance of 21 million to 26 million carats.
Anglo American also indicated it will continue monitoring rough diamond trading conditions and keep supply aligned with demand, leaving open the possibility of further production cuts if market conditions do not improve.