London, England — MININGREVIEW.COM — 20 October 2011 – The De Beers Group “’ suppliers of about a third of the world’s rough diamonds “’ says prices of the gems may “stick” at current levels, after demand from India and China spurred a more than 35% rally this year.
Increasing wealth in the expanding economies of the two countries’ is enabling consumers to buy more diamond jewellery, compensating for slower growth in the U.S., the biggest retail-gem market.
“Demand from East Asia caused a supply shortage,” said CEO Philippe Mellier. “We’re now reaching a new plateau from which prices are going to oscillate,” Mellier added in a telephone interview from here. “I am expecting this new level of pricing to stick.”
Mellier was appointed as the leader of De Beers in May, marking a break with the tradition of promoting from within as the Johannesburg-based company sought to recover from the global economic crisis that had forced it to slash prices and idle mines. The company is 45% held by Anglo American plc, 40% by South Africa’s Oppenheimer family and 15% by the government of Botswana.
“While retail sales in India and China are very, very strong, sales in the U.S. are growing, defying expectations of a decline,” Mellier said. “All the numbers we are receiving from the U.S. from our partners and from our own stores are telling us that the sales are up “’ not hugely up, but up,” he added.
De Beers estimated in February that the U.S. had bought about 38% of diamond jewellery in 2010, with India making up about 10% and China and Hong Kong a combined 11%.
“We don’t see any softening of the demand,” Mellier said.
De Beers mines diamonds by itself or in joint ventures in South Africa, Canada, Botswana and Namibia.