HomeDiamonds & GemstonesAsian markets to the rescue

Asian markets to the rescue

The De Beers
Jwaneng operation
in Botswana
New York, USA — MININGREVIEW.COM — 29 September 2008 – De Beers – the world’s biggest diamond company – is of the opinion that increasing gem sales in Asian markets will play a significant role in compensating for stagnant or reduced U.S. demand caused by the credit crisis.
In an interview with Bloomberg News here, Jonathan Oppenheimer – head of the chairman’s office at De Beers and a director of its Diamond Trading Company – said: “If somebody said they weren’t concerned about the States, they’d be smoking something. There may be a balance in terms of the U.S. being similar to last year, maybe a little bit weaker, and China and India each picking up some of the slack.”

He added that the De Beers’ sales unit, based in London, was weighing potential effects of the credit crisis. “Global demand for diamonds is increasing and supply remains static amid a dearth of new mine discoveries,” he added.

Continued demand – especially for high-value, gem-quality stones – has helped Johannesburg-based De Beers weather the slowing economy so far this year in the U.S., which accounts for about half of the world’s diamond-jewellery sales. Prices rose by an average 16% up to 19August.

“There is more real money at the top end, and the credit crunch is going to hurt the guys who would buy at the bottom end a little more,” Oppenheimer continued. “I suspect a continuation of the top end being favourable.’”

De Beers is tapping deposits in Botswana, Namibia, South Africa, Tanzania and Canada, to keep pace with growing demand from increasingly wealthy Chinese and Indian consumers.

The company says its production will probably drop to about 50 million carats this year from 51.1 million in 2007, as it sells unprofitable mines in South Africa to expand in Canada and Botswana. Sales of natural diamonds rose to US$3.3 billion (R26.4 billion) in the first half of 2008, from US$2.99 billion (almost R24 billion) a year earlier.