London, England — 16 October 2012 – Mining giant Anglo American’s rough diamond revenues have received a much-needed boost with its 85%-owned subsidiary De Beers “’ the world’s leading diamond company “’ registering its best ‘sight’ of the year in October.
Analysts estimate some US$750 million worth of unpolished diamonds were sold in the latest October sight, higher than the US$600 million and US$325 million estimated to have been sold in the September and August sights respectively, reports Miningmx.
De Beers’ marketing company, the Diamond Trading Company (DTC, the brand of which is due to be phased out) holds ten sights per year in which approved buyers of unpolished diamonds are invited to buy a mix of diamonds from the producer. Times have been difficult in the diamond market, however.
Earlier this year, the DTC took the unusual step of allowing diamond buyers to defer payment for half of their goods until the end of March, 2013. Some of those deferrals were brought into the October sight.
According to Peter Davey, an analyst with SGB Securities, some US$4.74 billion in rough diamond sales has been collected by the DTC in the year-to-date.
As a result, he adjusted forecast full-year sales upwards to US$5.3 billion from a previous estimate of US$4.94 billion. The DTC sold US$6.5 billion in 2011. At the half-year point this year, it had sold US$3.1 billion, some US$400 million less than at the interim stage in 2011.
This is good news for Anglo American which in August finalised the purchase of the Oppenheimer’s 40% stake in De Beers for US$5.2 billion.
RBC Capital Markets analyst Des Kilalea agreed that the DTC had a good month in October, but that was owing partly to a carry-over of the diamonds, the purchase of which buyers were allowed to defer in the first half of the year.
The DTC dropped prices about 10% in the August sight, but maintained those prices in the October sight “’ a development that would not please sight-holders who were simultaneously having to make up on deferrals, Kilalea said.
Regardless, the high sales for DTC this month should position it for a strong run in the final quarter of the year with a combination of three festivals: Diwali, Thanksgiving and Christmas traditionally giving sales a strong finish.
Source: Miningmx. For more information, click here.