CaratDe Beers digs 88% more, banks 44% less
Second-quarter rough output jumped 88% to 7.8 million carats even as the average price fell 32% to $105 a carat. Revenue slid 44% to $665 million. Production is rising into the weakest market in a generation.
§1Eighty-eight percent more carats is the flattering number.
The headline number from De Beers' second-quarter production report, published July 23, looks like a recovery: 7.8 million carats out of the ground, up 88% on the same quarter a year ago, when the miner had throttled output to defend prices. First-half production reached 14.91 million carats, up 46%. Botswana did the heavy lifting, raising output 107% to 5.5 million carats; Venetia in South Africa added 700,000 carats, up 24%; Gahcho Kué in Canada contributed a million; only Namibia, at half a million carats, held flat. On the mine plan, this is a business running closer to capacity again.
The price line tells the opposite story. The average realised price fell 32% year on year to $105 a carat, and De Beers' rough price index, its measure of like-for-like pricing, was down 16%. Second-quarter sales reached 7.1 million carats, but revenue from them fell 44% to $665 million; first-half rough revenue was $1.31 billion, down 23%. Producing more into a market that pays less is the arithmetic of a company that has decided inventory on the balance sheet is worse than stones sold cheaply.
§2The price line is the honest one.
The guidance carries its own warning. De Beers held full-year production guidance at 21 to 26 million carats, a wide band that already builds in planned maintenance and, more tellingly, an expected pause at Venetia in the second half. The mine that just posted a 24% output gain is scheduled to go quiet, a reminder that the 88% rebound is measured against a deliberately starved 2025 rather than against health. Lab-grown competition, the company noted, continues to press the lower-value end of the book while premium goods hold firmer.
Producing more into a market that pays less is the arithmetic of a company that has decided inventory on the balance sheet is worse than stones sold cheaply.
§3The real story is a business dressed for sale.
Around the production report sits the larger question of ownership. Anglo American, De Beers' parent, has flagged that underlying earnings at the diamond unit will be negative for the first half and has repeated that it is progressing the sale of the business while cutting costs. Reports last week named a consortium led by former De Beers chief executive Gareth Penny as the front-runner to buy the 85% stake, though Anglo has declined to confirm. A full-year 2025 earnings loss of $511 million is the backdrop against which any buyer is doing its sums.
A miner that digs 88% more and earns 44% less is not recovering; it is clearing its throat before a sale. The production rebound flatters a comparison against a year De Beers spent holding stones back, and the Venetia pause tells you management still does not trust the market to absorb the goods. For a buyer, the appeal is the brand and the reserves, not this quarter's tape.
For the trade, the signal is simpler: rough is cheap and getting cheaper, and the company that sets the price has stopped pretending otherwise.
The trade, filed to your inbox before the New York open.
Prices, tenders and the one story that moved the industry overnight — read in ninety seconds.
Subscribe free →