HomeDiamonds & GemstonesDe Beers Group sales are rising

De Beers Group sales are rising

Diamond sales appear
to be rising again,
says De Beers
 
London, England — MININGREVIEW.COM — 14 April 2009 – The De Beers Group – the world’s largest diamond producer – has revealed that its sales are rising this year in the wake of plunging demand in 2008, as a result of the worldwide economic slowdown.

In an e-mailed statement from here, spokeswoman Lynette Gould said: “While still at lower-than-normal levels, sales have been steadily increasing since the end of last year. Cash flow was positive in March, and De Beers is optimistic about meeting annual goals,” she added.

In February, De Beers suspended mining in its Debswana joint venture with the government of Botswana that produces a fifth of global diamond supply. It then received government approval to halt production at its Namibian mine from 1 April 2009 for a period of three months due to weak sales. And at the beginning of this month, the company halted exploration in the Democratic Republic of Congo (DRC) in the face of the declining value in the gemstones.

“Shutting mines and cutting jobs may help De Beers – 45%-owned by Anglo American Plc – to remain profitable, even at a significantly lower level of sales,” Gould said. “De Beers may save more than US$1.5 billion (R14.25 billion) of planned expenditure this year,” she added

Bloomberg News reports that diamond mines in Botswana will probably return to operation this week.

“The Debswana venture is expected to resume production at its Jwaneng, Orapa and Letlhakane mines on April 15,”Gould revealed. The venture produced 32.3 million carats in 2008.

Diamond prices fell 7% in the first quarter of 2009, after slumping 9.2% in 2008, according to the PolishedPrices.com index. Meanwhile Tiffany & Company – the world’s second-largest luxury-jewellery retailer – reported a 76% plunge in fourth-quarter profit last month, after even the wealthiest shoppers had spent less.

Rough diamonds don’t trade on commodity exchanges, Bloomberg explains. Instead, De Beers – which sells about 60% of the world’s uncut gems – holds 10 annual sales, known as sights, to selected customers from Belgium, Israel and other countries known for diamond-cutting.

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