The pit at the
De Beers Jwaneng
mine in Botswana
 
London, England — MININGREVIEW.COM — 11 February 2011 – The De Beers Group “’ the world’s largest diamond producer “’ returned to profit in 2010 as production rose 34% amid a strong recovery in diamond prices, but the group remains cautious about the market this year.

In a statement issued here, De Beers revealed that it had posted net earnings after one off items of US$598 million, compared with a net loss of US$220 million in 2009, after recovering a better-than-anticipated 33 million carats. It had targeted production of about 30 to 31 million carats for 2010.

“The price of rough diamonds has recovered strongly as confidence returned to most parts of the diamond pipeline,” the company said. “Notwithstanding this, the industry is not back to pre-recessionary levels in terms of production or sales, and a high degree of global uncertainty remains.”

De Beers said it planned to increase production to 38 million carats this year, approaching full production which would, as planned, be achieved in 2012.

De Beers is 45% owned by mining group Anglo American, 40% by South Africa’s Oppenheimer family and 15% by the Botswana government.

Anglo American, which is due to report its full-year earnings later this week, said it would post underlying earnings of US$302 million for the year from its investment in De Beers. “While the directors remain cautious about the diamond market in 2011, continued positive growth is expected, albeit at a lower rate,” De Beers added.

“After a better than expected Christmas retail season, the U.S. market is expected to continue its recovery, and the exceptional growth seen in China and India is expected to be sustained,” the statement continued.

De Beers did not comment on its search for a new chief executive, after its previous CEO’s surprise departure in July.