De Beers seen lifting diamond sales by 11%

JOHANNESBURG – Leading world diamond producer De Beers is likely to increase half-year sales by 11 per cent to US$3,31 billion (N$21,8 billion) on the back of higher prices and ramped-up production, analysts said on Friday.

The company said in April that US consumers’ appetite for its gems would drive demand higher. In 2004, De Beers raised its rough diamond prices three times, totalling around 14 per cent, and has done so twice this year in January and June, both times by three per cent.Five analysts surveyed by Reuters forecast rough diamond sales in a range between US$3,17 billion and US$3,53 billion from De Beers’ London-based Diamond Trading Co.for the six months to the end of June, up from sales of $2.983 billion a year ago.De Beers plans to issue half-year sales figures today.”The forecast rise in sales is based on the two price increases that have already come through, and the production increase since last year,” a Johannesburg-based analyst said.De Beers, which controls over half the world’s diamond supply, is 45-per cent owned by mining conglomerate Anglo American and 45 per cent by South Africa’s Oppenheimer family.The government of Botswana — the world’s top diamond producer by value — owns the remaining 10 per cent.The analysts declined to estimate how much the half-year sales would contribute to Anglo’s earnings.De Beers’ rough diamond sales rose three per cent in full-year 2004 to just under US$5,7 billion and slightly below expectations.Another analyst said the group’s full-year 2005 rough diamond sales were expected to rise to US$6,1 billion, with about US$2,9 billion seen coming in the second half of the year.”We expect the increase to come from the rising demand for diamonds; in the U.S.and also China for instance, and given the tight supply in the rough (diamond) market,” the analyst said.Analysts said most of the increase in output in the first-half would come out of De Beers’ Botswana operations.De Beers, which mines mainly in South Africa, Namibia and Botswana, has previously blamed a strong rand for pushing up costs in its loss-making operations, eating into the group’s profit, but the rand has weakened against the dollar this year.A London-based analyst said he was keen to hear De Beers’ outlook and whether it could be affected after China on Thursday abandoned its dollar peg in favour of a basket of currencies to manage the yuan.He said theoretically the change should make commodity imports cheaper for Chinese buyers.”China has to pay in dollars to import diamonds, a stronger Chinese currency they may mean they can buy more and this could be good news for the diamond market,” the analyst said.Analysts also said they were keen to hear any news of De Beers’ new projects and 2005 production levels.Plans to sell a stake to a black group as required by South Africa and news on a proposed South African law that could require some of De Beers’ diamonds to be processed locally were also of interest, analysts said.-Nampa-ReutersIn 2004, De Beers raised its rough diamond prices three times, totalling around 14 per cent, and has done so twice this year in January and June, both times by three per cent.Five analysts surveyed by Reuters forecast rough diamond sales in a range between US$3,17 billion and US$3,53 billion from De Beers’ London-based Diamond Trading Co.for the six months to the end of June, up from sales of $2.983 billion a year ago.De Beers plans to issue half-year sales figures today.”The forecast rise in sales is based on the two price increases that have already come through, and the production increase since last year,” a Johannesburg-based analyst said.De Beers, which controls over half the world’s diamond supply, is 45-per cent owned by mining conglomerate Anglo American and 45 per cent by South Africa’s Oppenheimer family.The government of Botswana — the world’s top diamond producer by value — owns the remaining 10 per cent.The analysts declined to estimate how much the half-year sales would contribute to Anglo’s earnings.De Beers’ rough diamond sales rose three per cent in full-year 2004 to just under US$5,7 billion and slightly below expectations.Another analyst said the group’s full-year 2005 rough diamond sales were expected to rise to US$6,1 billion, with about US$2,9 billion seen coming in the second half of the year.”We expect the increase to come from the rising demand for diamonds; in the U.S.and also China for instance, and given the tight supply in the rough (diamond) market,” the analyst said.Analysts said most of the increase in output in the first-half would come out of De Beers’ Botswana operations.De Beers, which mines mainly in South Africa, Namibia and Botswana, has previously blamed a strong rand for pushing up costs in its loss-making operations, eating into the group’s profit, but the rand has weakened against the dollar this year.A London-based analyst said he was keen to hear De Beers’ outlook and whether it could be affected after China on Thursday abandoned its dollar peg in favour of a basket of currencies to manage the yuan.He said theoretically the change should make commodity imports cheaper for Chinese buyers.”China has to pay in dollars to import diamonds, a stronger Chinese currency they may mean they can buy more and this could be good news for the diamond market,” the analyst said.Analysts also said they were keen to hear any news of De Beers’ new projects and 2005 production levels.Plans to sell a stake to a black group as required by South Africa and news on a proposed South African law that could require some of De Beers’ diamonds to be processed locally were also of interest, analysts said.-Nampa-Reuters