Gaborone, Botswana — MININGREVIEW.COM — 11 September 2009 – Chinese demand for diamonds has not faltered during the last year, although it is too soon to tell whether confidence has returned to the key United States. market, says top global producer Debswana.
“China has tended to maintain demand. They’ve been very good to the diamond industry at this time, but they’re small,” Debswana managing director Blackie Marole told Reuters in an interview here.
“In America, yes, we are seeing demand, but we won’t know until after Christmas whether it’s final consumer demand, or simply re-stocking demand. We will have to watch Thanksgiving and Christmas very closely," he said.
“Debswana “’ a joint venture between De Beers and the Botswana government “’ will only produce 20 million carats of diamonds this year, compared to normal annual output of around 33 million carats, despite signs of a recovery,” Marole added.
“The outlook looks much more promising than we experienced at the end of last year and the beginning of this year,” he said. “However, I believe it is only prudent to produce about 20 million carats this year.”
The United States accounts for half of all diamond jewellery sales, while emerging giants China and India between them account for about a fifth.
It also takes three months for a rough diamond to end up as the polished article in a jeweller’s window in London or New York, making it hard for Debswana to tell whether a rise in rough prices in the last few weeks is consumer demand or simply the jewellery industry restocking.
Hammered by the collapse in demand for the precious stones due to the financial crisis, Debswana suspended mining for months earlier this year, the first shut down in 40 years.
The collapse in the diamond market since the onset of the financial crisis a year ago has had a dramatic impact on Botswana, a country of only 1.8 million people.
Marole said Debswana, the central pillar of Botswana’s economy, would cut costs by 25% this year, including reducing its workforce to 5 300 from 6 200 people last year.