De Beers diamond sales fall by 6%

JOHANNESBURG – The world’s top diamond producer De Beers posted six per cent weaker 2006 rough diamond sales on Friday due to reduced Russian supply and a sluggish market, warning that 2007 sales would be constrained by supply.

De Beers, 45 per cent owned by mining group Anglo American Plc, said rough diamond sales in 2006 slid to US$6,15 billion from US$6,54 billion the year before. Sales this year by marketing arm Diamond Trading Company (DTC) would be mainly hit by an anti-monopoly deal with European regulators to phase out distribution of Russian diamonds.”While DTC sales are likely to be constrained by availability in 2007, due to the reduction in Russian purchases as agreed with the EU, the De Beers Group will benefit from bringing new production on-stream towards the end of Q3,” a statement said.Overall group production rose 4,1 per cent to touch a record 51 million carats, with Botswana accounting for the bulk of production.De Beers said its contribution to underlying earnings of Anglo American was US$227 million.Meanwhile, De Beers and the South African government will form a new diamond mining company, they said also on Friday.The new company would combine the assets of state mining group Alexkor and the Namaqualand mine owned by the South African unit of De Beers, according to a joint statement by the firm and the government.As part of the creation of the new firm, De Beers would issue a 20 per cent stake in Namaqualand mines to South Africa’s mining ministry.Nampa-ReutersSales this year by marketing arm Diamond Trading Company (DTC) would be mainly hit by an anti-monopoly deal with European regulators to phase out distribution of Russian diamonds.”While DTC sales are likely to be constrained by availability in 2007, due to the reduction in Russian purchases as agreed with the EU, the De Beers Group will benefit from bringing new production on-stream towards the end of Q3,” a statement said.Overall group production rose 4,1 per cent to touch a record 51 million carats, with Botswana accounting for the bulk of production.De Beers said its contribution to underlying earnings of Anglo American was US$227 million.Meanwhile, De Beers and the South African government will form a new diamond mining company, they said also on Friday.The new company would combine the assets of state mining group Alexkor and the Namaqualand mine owned by the South African unit of De Beers, according to a joint statement by the firm and the government.As part of the creation of the new firm, De Beers would issue a 20 per cent stake in Namaqualand mines to South Africa’s mining ministry.Nampa-Reuters