JOHANNESBURG (miningweekly.com) - Global diamond miner De Beers has set a production target of as high as 36-million carats for 2018.

In its 2017 results announcement the Anglo American subsidiary reported a production guidance of 34-million carats to 36-million carats, which compares with 33.45-million carats produced in 2017.

"Improving global macroeconomic conditions remain supportive of consumer demand growth for polished diamonds in 2018," De Beers said on Thursday, although it noted that the degree of global economic growth would be dependent on a number of factors, including the extent of the positive impact on consumer spending growth from US tax cuts.

The miner reported a 2% improvement in its underlying earnings before interest, taxes, depreciation, and amortisation (Ebitda) to $1.44-billion in 2017, despite a lower revenue of $5.8-billion following the one-off industry midstream restocking in 2016.

This performance, the company noted, was driven by improved margins, which benefited from lower unit costs, which were supported by higher production and efficiency drives across the business, a strong contribution from Canada, and Element Six, which benefited from a recovery in oil and gas markets.

However, this was partly offset by unfavourable exchange rates, and an increasing proportion of waste mining costs being expensed rather than capitalised, owing to an improved strip ratio at Venetia, in South Africa.

Total revenue declined by 4% to $5.8-billion, with the average realised rough diamond price decreasing by 13% to $162/ct mainly owing to a lower value mix. This was partly offset by an 8% increase in consolidated sales volumes to 32.5-million carats.

Capital expenditure reduced by 48% to $273-million, mainly owing to the completion of major projects, including Gahcho Kué, in Canada, Debmarine Namibia's new exploration and sampling vessel, the SS Nujoma; and planned lower waste capitalisation at Venetia.

HIGHER PRODUCTION

Botswana (Debswana) increased production by 11% to 22.7-million carats, with production at Orapa being 28% higher, mainly driven by planned increases in plant performance and the ramp-up of Plant 1. In June 2017, Jwaneng processed its first ore from Cut-8, which is expected to become the mine's main source of ore during 2018.

In Namibia (Namdeb Holdings), production increased by 15% to 1.8-million carats.

At Namdeb's land operations, production rose by 6%, despite challenging conditions, including grade variability owing to the nature of alluvial deposits, structural cost pressures, and some operations nearing the end of their lives.

In South Africa, De Beers Consolidated Mines increased production by 23% to 5.2 million carats, primarily owing to Venetia. Construction continues on the Venetia Underground mine, which is expected to become the mine's principal source of production during 2023.

In Canada, production increased to 3.8-million carats owing to the ramp-up of Gahcho Kué, which entered commercial production in March 2017.

During the year, Gahcho Kué benefited from higher than expected grades, partly offset by a lower average value of production.

However, owing to the differences in lobe characteristics across different kimberlite pipes, the average grade and realised price will continue to vary and will be dependent on the area mined.