Despite the financial slowdown, De Beers focuses on synthetic diamonds and Botswana

De Beers recently revealed a 21% decrease in its net profit for the first half of 2023, despite maintaining stable revenue. The company is betting on synthetic diamonds and strengthening its production in Botswana.

Eva Morletto

By Eva Morletto08 août 2023

An initial investment of $94 million has enabled De Beers to explore the synthetic diamond market since 2018 (De Beers)

The South African diamond giant, De Beers, has recently released its financial results for the first half of 2023. Although revenue remained stable, with rough diamond sales of 15.3 million carats (a similar volume to 2022), net profit decreased by 21% to reach 2.8 billion dollars. This decline is attributed to stagnant international demand and significant investments undertaken by the company. The publication of the results also provided an update on the development of its diamond production.

Since 2018, De Beers has been exploring the segment of synthetic diamonds, primarily produced in its laboratory plant in Portland, USA. An initial investment of 94 million dollars allowed De Beers to delve into this emerging market. Today, synthetic diamonds represent between 1% and 10% of a global market valued at 80 billion dollars.

Regarding natural diamonds, De Beers boosted its production in Botswana and Namibia in 2023. Indeed, Botswana, with a production of 12.7 million carats, an increase of 9% compared to the previous year, contributes 75% of the group's total production. The Orapa mine in Botswana is crucial for De Beers' development: operated by the group in partnership with the local government, it alone provides 10% of the world's diamond production. New extraction techniques developed at the mine have optimized production this year.

However, South Africa's importance is diminishing, with a 59% production decrease following the closure of the Venetia open-pit mine. A 2-billion-dollar investment was launched in 2013 to convert this mine into an underground operation, extending its lifespan until 2046. These heavy investments have weighed on the group's semi-annual financial results, but their impact is expected to reduce in future reports.

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