Antwerp, Belgium — MININGREVIEW.COM — 05 June 2009 – Diamond inventories have fallen to levels justifying a ramp-up of production, with signs that the key Christmas sales season will be better this year than last.
Revealing this here, De Beers head Gareth Penny told a meeting of diamond dealers that rough stocks were 20 to 30% down from mid-2008 peaks. “There is clear evidence that rough diamond stocks have come down to reasonably acceptable levels, and I am hearing that more rough needs to come into the system,” he said.
De Beers – the world’s largest diamond group and 45% owned by mining conglomerate Anglo American plc – slashed production in the first quarter of 2009 by 90% from the last three months of 2008, and by 91% year-on-year.
But Reuters reports that the diamond group – which has 41% of the rough market – has hiked output in the second quarter of this year with the re-start in April of the major Debswana mines, which accounted for over 65% of De Beers production in 2008.
Penny said mining at the Debswana sites in Botswana had reached a level of more than 80% of capacity.
Demand for polished diamonds has fallen by as much as 30% and for rough diamonds by as far as 60% from mid-2008 peaks. However, De Beers believes that consumer demand for jewellery is down a more modest 10 to 15 %, and has actually risen in China. “This is not a 50 to 60% drop-off,” Penny said.
“December and Christmas of 2009 will be better than in 2008. I think that’s a pretty reasonable assumption from where we are sitting now,” Penny added.